$20.2 billions in sales by 2021, according to Forbes. That is a GDP of 22% off of existing sales of medical marijuana! In KY we are losing out on big dollars, while Frankfort wants to raise gas prices.
Not only is medical marijuana a solution for those who have health concerns that other drug treatments are unable to help, this state is leaving money on the table while we have traffic snarled roads with hours of commute times and cutting benefits, services and resources for police, fire, ems, teachers and state workers. (Additionally even increased hemp production is yet another potential consumption based revenue stream, as outlined in this article by the Courier-Journal. To say nothing of the worldwide export potential for Kentucky.)
If you live in Metro Louisville you understand that Metro suffers from unfunded road projects that this administration and General Assembly all agree need to be completed. Yet Frankfort chooses to use Metro taxes as a bank to fund rural county road projects who have little traffic problems.
Now, Frankfort is telling us that in order to fund our Metro Louisville traffic projects, they want to raise our gas prices.
Metro Louisville only gets back 40-45 cents on every dollar we send to Frankfort while refusing to even consider revenue that is consumption based and does not raise taxes on gas prices, income or property.
The first rule of business is never leave money on the table. Yet Frankfort is doing just that.
(This next paragraph is long, but I wanted to provide you with how I arrived at numbers.)
A good business person always looks to create a Pro Forma financial of revenue projections when looking at new markets and opportunities. In an effort of due diligence, I have looked at several states where they have medical marijuana sales, and where I could find their documentation on their web sites for medical marijuana. I then looked at their revenue based on percentage of sales. After looking at their reported revenue streams, I took out those dollars from the state where recreational use was legal, and only looked at the medical marijuana sales. I then broke those sales down into averages based on that state’s population. The states where I could get the data was from 2014 and included the following: California, Colorado, Washington (state), Arizona, New Mexico, Maine and Rhode Island.
On average, each state gets approximately, 25% of all medical marijuana sales in revenue. Yes, 25%! Is there any business person in America that would turn down 25% on sales volume margins?!
Using those figures, I have come up with an initial projection of $5,400,000 in revenue based on sales of nearly $22,000,000 in the third year of operation, with a projected growth of $26,000,000 by the third year out and a projecting a 22% increase year over year when the growth will likely stem based on market penetration. Those are conservative numbers and is “recurring” revenue based on consumption revenue streams.
We can use this type of revenue stream to not only help fund our road projects but also to fund additional programs like an Employee Benefit tax incentive for companies to help their employees pay down their student loan debt and help fund the state pension program.
Our community, Metro Louisville, and especially those that have to travel the Gene Snyder deserve better.