States looking to increase revenue are increasingly looking to cannabis and taxes could increase by a factor of six by the end of the decade, according to a new analysis from Barclays.
The firm expects tax revenue generated for states in the U.S. to jump to between $10 billion and $12 billion by 2030 from more than $2 billion last year.
That total would exceed tax revenue from alcohol, according to the investment firm.
"We’ll have some long-lasting consequences of the pandemic and you’ll need to make money up somewhere,” said Mikhail Foux, Barclays's head of municipal strategy, according to Fortune.
Legal sales of cannabis totaled $17 billion in 2020 and should increase to as much as $27 billion this year. By 2030 sales should reach $80 billion, the investment firm estimates.
As of this year, 18 states have enacted laws legalizing, regulating and taxing cannabis for adults. Of those states, eight passed their laws between 2020 and 2021, at the height of the Covid-19 pandemic and subsequent lockdowns
California currently leads the pack, reporting more than $1 billion in cannabis tax revenue for 2020. Since 2018, the state has brought in more than $2 billion in tax revenue, according to the Marijuana Policy Project.