Marijuana Taxes for Education

Non-Legal States Race To The Bottom In Dollars Spent Per Student

We always think about marijuana legalization in terms of the direct effects it would have on the state and its residents; elimination of unjust persecution of marijuana users, better allocation of resources, the tax revenue windfall, and the availability of needed medicine for MMJ patients.

But there’s often an unmentioned detrimental consequence of marijuana legalization to the states that maintain their prohibition on weed. Some neighboring states have complained that legalization has resulted in an “overflow” of marijuana users and traffic. And while this issue remains to be determined definitively in court, we believe there’s a greater impact that’s being ignored.

The continued illegality of marijuana in many states has created a situation that puts students in these states at a distinct financial disadvantage to students in “legal” states. Students living in states that maintain their prohibition on marijuana are falling behind their peers in terms of the money the state spends per student.

All the states that legalize marijuana, particularly recreational marijuana, dedicate a large portion of the resulting marijuana tax revenues for the education.  And these states are starting to collect massive amounts of tax revenues. Colorado recently reported over 100% increase from last year in taxes collected on weed, and the state is on track to do over $100 million, just for 2015. What’s notable is that the state’s overall level of marijuana users did not increase materially during this time. The increase is primarily from people who used to buy on the black market now doing so legally and paying taxes.

How will having an extra $100 million in tax revenue affect the level of education in the state for Colorado? No rational argument could be made that the quality of education would go down from the extra funds. Looking at the national state rankings in education and the amount of money spent per student, there is a direct correlation; more money spent per student generally means higher ranking in education relative to students in other states.

Top Three States “Report Card on American Education”, Dollars Spent Per Pupil, & Potential Marijuana Tax Revenues

StateDollars Spent Per StudentPotential Marijuana Tax Revenues
New Jersey$17,572$69,900,900

Bottom Three States “Report Card on American Education”, Dollars Spent Per Pupil, & Potential Marijuana Tax Revenues

StateDollars Spent Per StudentPotential Marijuana Tax Revenues
South Dakota$8,470$6,444,863
West Virginia$11,132$11,933,874
South Carolina$9,514$47,835,079

The three top ranked states in education spent on average $16,155 per student. The bottom three states in education spent on average $9,705 per student, or $6,450 LESS per student. The students living in the bottom ranked states are being outspent and falling behind their peers in education.


States like Massachusetts, which spends $14,515 per student and is already top in the nation for education, would reap as much as $82 million per year in marijuana tax revenues. Even if only a part of this new source of funding was used for education, it would further boost the state’s educational spending per student and students’ academic achievement.

For states at the bottom in national education ranking, which spend around $9,700 per student, the additional source of revenue would make an even bigger impact due to the relatively small per student budgets. A state such as South Carolina, which is last in the nation in education, spends only $9,514 per student; legalizing marijuana could bring in an additional $48 million in taxes each and every year.

Some educational areas that these funds could be used to give the state’s students a competitive advantage include:

  • More teachers for lower student/teacher ratios
  • Improved facilities for happier and safer students
  • Additional equipment, especially for teaching technology

The educational funding differences between those states with legal marijuana and those without will continue to build over time as marijuana tax revenues becomes a reliable source of funding for legal states.


Parents have been some of the most vocal critics of marijuana legalization. However, their concern that legalization will result in higher marijuana use among teens by increasing availability and easing attitudes against weed is proving to be untrue. Although it sounds intuitive that such could potentially be the case, the facts do not bear this out.

A study of marijuana use among Colorado high school students showed a slight decrease from 24.8% to 22.0% in the years after medical marijuana became legal. A recent report published by Professor Mark Anderson shows “no increased youth marijuana use and states legalizing medical marijuana”. The finding is further supported by the fact that Colorado is slightly below the national average in marijuana use among teens.

While more studies should be done with relaxing of the laws on marijuana research, the states that have legalized weed are not seeing any material jump in teen marijuana use.

What is turning out to be true, however, is that marijuana poses no greater risk, and probably less, than alcohol to young people.


With more studies showing no correlation between marijuana legalization and its use among teens, the argument for marijuana legalization in the context of maintaining a state’s educational competitiveness becomes almost a matter of responsibility to the students.

Legal marijuana is the fastest growing industry in the U.S. with projections going into the billions. All of it will be taxed at the state level with part of the funds being used for education. Students of these states will benefit from the additional funding which will help them rise to the top of the nation in educational rankings.

Parents of students in non-legal states must consider the potential gap that will develop over the coming years in education spending as a result of a state’s prohibition on marijuana tax revenues.

What are your thoughts? If you are in a state where marijuana is still illegal, is the potential disadvantage in spending per student for education a concern? Sound off in the comments below!



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