Cannabis was supposed to be a tax windfall for states. The reality has been different.

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Politico

States looking to legalize recreational marijuana might believe they're going after easy money.

Think again. States that have legalized recreational cannabis are finding that it's not always the cash cow they envisioned. And there are plenty of other complicated issues to confront as they try to create and manage a legal market for a product long considered taboo. 

Eleven states and the District of Columbia have given the green light to recreational cannabis, starting with Colorado and Washington state in 2012, with sales already underway in seven states. In those states, bringing marijuana into the legitimate economy was often sold to officials and the public as a way to raise new tax revenue from sales and production and funnel it into areas like education, mental health and law enforcement.

So what have those states experienced? Tax revenue that has largely fallen short of expectations and a growing recognition that taxing marijuana is pretty complicated.

It’s not just that states have struggled in projecting the size of a legal marijuana market and deciding how to best tax and regulate it. In a lot of ways, states are also grappling with their central goal of bringing cannabis out of the black market.

Advocates for legalization in California originally envisioned legalized pot raising $1 billion a year. As it turns out, the state raised not even a third of that in fiscal 2018-19, the first full year since recreational sales began. Massachusetts had projected it would bring in $63 million in revenue for its first year of recreational pot, which ended in June, and didn’t even get half of that.