PORTLAND -- Retailers in Washington State are seeing green as customers started lining up this week up to buy legal marijuana.
The state estimated it could rake in $586 million from pot taxes between 2015 and 2019. Advocates sold it as a big money maker, but some skeptics believe the state won't make as much as they have predicted.
"It will generate some revenue. Not for very long," said Mark Kleiman, a public policy professor at UCLA, who helped create Washington's marijuana policy as a consultant to the state. "There are lots of good reasons to legalize cannabis but revenue isn't one of them."
Pot is relatively cheap and easy to produce. "The natural price of producing cannabis is relatively low and it is going to be very difficult with a percentage of price tax to capture any significant amount of revenue," said Kleiman. "Forty percent of nothing is nothing."
The tax plan in Washington was a selling point of the marijuana ballot initiative. There's a tax of 25-percent each on growers, processors and retailers.
Pro-marijuana supporters hope to put an initiative on the Oregon ballot in November.
"The revenue aspect is definitely an important piece of the puzzle," said Anthony Johnson, director of the advocacy group New Approach Oregon.
Johnson estimates if approved by voters, retail sales of marijuana in Oregon would generate $40 million in taxes annually.
Johnson admits it won't solve the state's budget woes, but it will help. "The savings that we create and the revenue generated will really impact the state and really fund services that we need like law enforcement agencies, mental health and substance abuse treatment programs," he said.
State economists around the U.S. are watching to see whether legalizing marijuana will help balance their budgets.
The public policy professor, Kleiman explains no one really knows how much money will be made. "We really don't have a clue."