Revenue Projections for Connecticut’s S.B. 1201 — Equitable Cannabis Legalization
Revenue Projections for Connecticut’s S.B. 1201 — Equitable Cannabis Legalization
The Marijuana Policy Project and the Connecticut Coalition to Regulate Marijuana support legalizing and regulating cannabis because we believe adults shouldn’t be punished for using a plant that is safer than alcohol. We also believe regulation and education — not prohibition — protects consumers, workers, and the environment.
While the economic benefits aren’t our driving reason for supporting legalization, we recognize that millions of dollars in revenue from cannabis taxes can have life-changing impacts, including by allowing people who desperately need substance abuse treatment to get the help they need and uplifting communities that are struggling due to racism, poverty, and unequal enforcement of drug laws.
We’ve calculated revenue projections that Connecticut might anticipate if S.B. 1201 is enacted. To do so, we adjusted Colorado’s annual sales figures and the volume of various types of products sold for Connecticut’s population. We used Colorado’s data on potency and adjusted downward due to S.B. 1201’s potency cap. Our estimates illustrate how much revenue Connecticut may expect, but actual revenues could be higher or lower depending on a number of factors, including how quickly Connecticut and its neighbors implement their legislation.
In all, we estimate Connecticut will generate more than $1.1 billion in state and local tax revenue over the first seven years of legalization. Starting in the fiscal year beginning in July 2026, we project the total cannabis tax revenue to exceed $215 million per year. Over the first seven years, we anticipate more than $480 million in funding for the Social Equity and Innovation Fund and more than $180 million for substance abuse treatment and prevention. Starting in the fiscal year beginning in July 2026, we project more than $97 million per year for the Social Equity and Innovation Fund and more than $37 million annually for substance abuse prevention and treatment.
Connecticut Cannabis Tax Projections1
Year Starting
Total Potency-Based Excise Tax
Sales Tax
6.35%
Local Tax
3%
Total State and Local Taxes
July 2022
$21,768,367
$11,294,249
$5,335,866
$38,398,482
July 2023
$51,307,050
$21,055,700
$9,947,575
$82,310,324
July 2024
$79,621,430
$31,041,371
$14,665,215
$125,328,016
July 2025
$115,877,639
$39,440,670
$18,633,388
$173,951,697
July 2026
$150,201,278
$44,575,149
$21,059,126
$215,835,553
July 2027
$151,634,781
$51,963,564
$24,549,715
$228,148,060
July 2028
$185,987,484
$63,735,856
$30,111,428
$279,834,767
Totals
$756,398,028
$263,106,559
$124,302,311
$1,143,806,898
Estimated Cannabis Excise Tax Revenue Allocations
Year Starting
Total Potency-Based Excise Tax
Social Equity & Innovation Fund
SE & I %
Substance Abuse Treatment & Prevention Fund
SA %
General Fund
GF %
July 2022
$21,768,367
$0
0%
$0
0%
$21,768,367
100%
July 2023
$51,307,050
$30,784,230
60%
$12,826,763
25%
$7,696,058
15%
July 2024
$79,621,430
$47,772,858
60%
$19,905,357
25%
$11,943,214
15%
July 2025
$115,877,639
$69,526,583
60%
$28,969,410
25%
$17,381,646
15%
July 2026
$150,201,278
$97,630,830
65%
$37,550,319
25%
$15,020,128
10%
July 2027
$151,634,781
$98,562,607
65%
$37,908,695
25%
$15,163,478
10%
July 2028
$185,987,484
$139,490,613
70%
$46,496,871
25%
$0
0%
Totals
$756,398,028
$483,767,722
$183,657,415
$88,972,891
1 Sales are projected to begin in May 2022 in Connecticut. Colorado had a more robust medical cannabis market to transition from than Connecticut. For that reason, and to allow for full-year projections, this starts as of July 1, 2022. Any excise tax revenues generated before July 1, 2022 are directed to the Cannabis Regulatory and Investment Account.