The marijuana legalization proposal that Arkansas voters will decide on at the midterm elections could net the state more than $460 million in tax revenue over five years should it be approved, according to a new analysis.
The group behind the legalization proposal, Responsible Growth Arkansas (RGA), commissioned the Arkansas Economic Development Institute (AEDI) to carry out the study, which anticipates almost $1 billion in annual marijuana sales by 2027 among other economic benefits such as boosted job growth.
“The measurable economic impact of introducing an adult-use marijuana market, including economic activity diverted from illicit markets, is estimated to increase state gross domestic product by up to $2.36 billion over five years and increase employment of up to 6,400 jobs by 2027,” said Michael Pakko, chief economist at AEDI, in an accompanying press release.
The analysis projects $163.1 million in state sales tax revenues from adult-use cannabis purchases over five years. Additionally, AEDI anticipates a further $303.6 million from the supplemental cannabis tax of 10 percent as outlined in RGA’s proposed constitutional amendment.
The analysts also laid out how these revenues would be apportioned annually under RGA’s measure. Law enforcement would receive $45.5 million, the University of Arkansas for Medical Sciences would receive $34 million, the state’s drug courts would receive $15.2 million and $212.5 million would go towards Arkansas’ general fund.
RGA recently released a campaign ad highlighting the funding boost the legalization measure would deliver for law enforcement should voters choose to reform Arkansas marijuana laws.
AEDI estimates combined recreational and medical sales in Arkansas would double in the first year compared to current medical cannabis sales, and continue to increase from $665.6 million in 2023 to $984 million by 2027.
AEDI’s analysis is based on Arkansas’ population and sales figures seen in states that have legalized recreational cannabis, while also factoring in the likelihood of purchases by out-of-state visitors.
In total, the marijuana legalization proposal could boost Arkansas’ GDP by $2.3 billion and create nearly 6,500 jobs within five years.
“We are officially on the ballot and have a great story to tell the voters of Arkansas,” said Eddie Armstrong, chairman of RGA. “Voters can create a new adult-use cannabis industry by voting for issue 4 on November 8th. Issue 4 will provide Arkansans with thousands of new good-paying jobs and hundreds of millions in new tax revenue.”
Despite handing in more than double the required number of verified signatures to qualify the measure for the state’s ballot, it was uncertain that the proposal would be given the green light after the Board of Election moved to reject it on the basis of the language being “insufficient.”
RGA countered by filing a lawsuit with the state Supreme Court, which eventually ruled in favor of the plaintiffs.
The latest polls suggest 59 percent of voters in Arkansas will support the legalization proposal. Here’s what it would achieve should that happen:
- Adults 21 and older would be able to purchase and possess up to one ounce of marijuana from state-licensed dispensaries.
- Home cultivation would remain prohibited.
- There would no longer be residency requirements for medical cannabis patients.
- The state Alcoholic Beverage Control Division of the Department of Finance and Administration would be charged with regulating the adult-use cannabis industry and licensing at least 40 marijuana retailers. Existing medical cannabis dispensaries would have first priority.
- Local jurisdictions would be able to hold a vote on whether or not allow marijuana businesses from operating in their locality.