The federal marijuana legalization bill passed in a historic vote last week by the U.S. House of Representatives would generate about $13.7 billion in net revenue for the U.S. treasury over the next decade, according to a new report by the Congressional Budget Office (CBO). It would also cut federal prison spending by nearly $1 billion.
Most of the new funds—roughly $8 billion—would come from business taxes on the legal marijuana industry, such as income and payroll taxes. A separate excise tax, initially based on the price of cannabis products, is estimated to yield another $5.7 billion.
“CBO and the staff of the Joint Committee on Taxation estimate that H.R. 3884 would increase revenues, on net, by about $13.7 billion over the 2021-2030 period,” says the nonpartisan report, published Friday.
Known as the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, the House-approved legislation would remove cannabis from the federal Controlled Substances Act, expunge past marijuana-related convictions and require certain criminal cases to be resentenced.
Those changes “would reduce time served by 73,000 person-years” among current and future inmates, the report says. “CBO estimates that provision would result in net savings of about $1 billion over the 2021-2030 period.”