The State of Montana’s tax coffers could benefit significantly if the marijuana legalization initiatives before the voters are passed in November.

Director of the University of Montana Bureau of Business and Economic Research, Dr. Patrick Barkey just wrapped up a study of the possible yearly tax revenues.

“We found that the total size of the market which is as you can imagine, not directly measurable since cannabis other than medical is not legal in Montana,” said Dr. Barkey. “So the total size of the market in the next four years or so is projected to grow slightly, but it's around 30 metric tons, which is a pretty good sized marketplace.”

Barkey got down to the sheer numbers of possible tax revenues that the state might net through legalized recreational marijuana.

“We'd looked at the experience of other states and the bottom line is that we think the revenue potential from a 20% sales tax on legalized recreational cannabis, but the size that revenue varies. It's roughly between $45 and $52 million per year, which is comprised of a resident share and a tourist share which is expected to grow in the coming years.”

Barkey compared the possible tax revenues from marijuana with that of tobacco and alcohol sales in the state.

“To give it some perspective, a tax on recreational cannabis as envisioned by the initiatives would yield an income which is a little bit less than cigarettes, and a little bit more than alcohol,” he said. “So it's sort of ranks in the middle, if you will, of those particular taxes. Of course, that would be new tax money for Montana since there’s currently very, very little.”

The study noted that  there could be up to $236.4 million in tax revenue for the five-year period. In addition, the recreational cannabis market total sales could potentially be between $217.2 and $259.8 million per year over the period of 2022-26.

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