In May of 2010 the District of Columbia legalized marijuana for residents with certain medical conditions. In June of 2010, the city council decided that medical marijuana should be subject to the city's sales tax.
Now That It's Legal, Let's Tax It
On June 15, 2010, the District of Columbia City Council approved their 2011 budget, which included provisions that would impose the city’s 6% sales tax on medical marijuana. The marijuana tax was approved as one of many changes aimed at balancing the books for the cash-strapped city.
Estimated Pot Revenue
The D.C. Office of the Chief Financial Officer (CFO) estimated that one ounce of medical marijuana would cost $350 and that the average patient would use one ounce a month. With a 6% sales tax rate, that comes out to $252 in sales tax per user per year. The Office of the CFO estimated that there would be 100 users 2011, with that number growing each year, to 850 users by 2014. Based on that, they estimated that the marijuana sales tax would bring in $400,000 in revenue over those four years. The actual number could be even higher since it's legal for users to purchase as much as two ounces of medical marijuana per month.
Where Does the Pot Money Go?
Regulations are still being put into place as to how medical marijuana will actually be distributed, but the tax dollars have already been earmarked for a specific purpose. All of the money from medical marijuana is supposed go to government health care programs for the citizens of D.C.
Source: The Associated Press