Marijuana legalization and decriminalization have become important policy issues. Twenty-three states have partially legalized marijuana (generally for medicinal purposes), and four – Alaska, Colorado, Oregon, and Washington – have legalized it for general adult recreational use. Given the likely hyper-growth of the cannabis market due to widespread legalization, states might enjoy budgetary windfalls from collecting marijuana taxes.
Marijuana, however, remains a federally controlled substance, the sale or use of which is subject to substantial penalties. For the states, this presents a potential problem in collecting marijuana excise taxes. If an individual user in a state where marijuana is legal pays an accompanying excise tax, the payment could be construed as admission of federal criminal possession of a controlled substance.