Estimates show $984M in AR marijuana sales by 2027, says TBP

Published: Sep. 28, 2022 at 10:51 PM CDT
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JONESBORO, Ark. (KAIT) - Modeling shows that Arkansas marijuana sales could reach $984 million in sales by 2027, with a tax gain of more than $260 million.

Content partner Talk Business & Politics said that according to modeling from the Arkansas Economic Development Institute, voter approval in November of recreational marijuana could add $2.4 billion to the state’s economy over five full years of implementation and add up to 6,400 jobs by 2027.

In November, Arkansas citizens will vote on amending the existing law for medical marijuana to allow anyone 21 years and older to purchase cannabis from licensed dispensaries.

Responsible Growth Arkansas commissioned the AEDI, housed at the University of Arkansas at Little Rock, to conduct an economic modeling forecast. This modeling shows legal marijuana sales in Arkansas over five years.

The modeling was adjusted based on the state’s medical marijuana industry, real demand and sales data from states that have moved from medical use to adult use, and more.

“The impacts implied by the full model are substantial. Looking at the measurable impacts, we see that total employment is predicted to increase by nearly 5,000 jobs in 2023, reaching as high as 6,400 by 2027,” said the report posted Sept. 28. “The contribution to GDP is estimated to rise from $370 million to nearly $543 million over the five-year period, with a cumulative total impact of nearly $2.4 billion.”

TBP listed the following key points:

  • The combined sales of medical and adult-use marijuana will more than double in the first year after adult-use implementation, with total sales increasing from approximately $665.6 million in 2023 to $984 million by 2027.
  • There is an estimated increase in state GDP of $2.36 billion over the five-year study period.
  • Increases in employment range from 4,900 jobs in 2023 to 6,400 jobs in 2027.
  • Excluding economic activity “diverted from illicit markets” the GDP growth is revised down to $1.89 billion over the five years, with job growth of 5,200 by 2027.
  • State sales tax receipts are estimated at $163.1 million, plus an additional $303.6 million from the proposed 10% supplemental sales tax on adult-use cannabis, representing an increase of $286.5 million in state sales tax revenue relative to the medical-only baseline scenario.
  • Personal income tax collections would increase by $30.8 million relative to the baseline.
  • County and municipal tax collections could total $92.6 million, representing an increase of $50.3 million over the baseline.
  • Of the $303.6 million in state revenue generated by the supplemental sales tax, earmarked transfers over the five-year period include: The provision of $45.5 million for annual stipends to law enforcement officers; Funding for UAMS totaling $30.4 million; and Support for drug courts of $15.2 million.
  • The report also estimates $162 million in new construction spending, with $32 million for 80 new retail stores