As More States Legalize Marijuana, Economics Comes into Play

[...]states typically do not subject prescription drugs to state sales taxes, while medical marijuana has been subjected to both state sales and excise taxes. [...]medical marijuana is taxed more like alcohol or tobacco than a medical drug. [...]is taxation on purchases, which reduces the quantity demanded in the market by increasing the price. [...]increases in tax revenue from recreational sales likely overstate the fiscal impact or could be shortlived. Consumers are likely to spend a greater share of their income on marijuana and less on other taxable goods, such as alcohol.- Furthermore, states may use the new tax revenue source as a replacement for existing revenue sources (or future revenue increases).11 Third, as is the case with many types of "sin taxes"-taxes on products such as alcohol, tobacco and the lottery-individuals in lower income brackets are generally more likely to consume these products, thereby producing a regressive tax policy.