Treasury: Medicinal cannabis could net $14M in revenue
A framework for the legal sale of medical cannabis would generate a new source of revenue for Puerto Rico, to the tune of $14 million a year in sales tax revenue for the Treasury Department, an agency official told lawmakers Tuesday.
During a joint public hearing for House Bill 818 and Senate Bill 340, to create the Medicinal Cannabis Law, Treasury Deputy Secretary Francisco Parés said the agency has already collected $100,000 in sales tax from limited cannabis sales.
However, he said that based on the premise that more than 27,000 Puerto Rico residents would be medical cannabis patients, the collection shoots to $14 million. He said the bill under scrutiny includes mechanisms to ensure the control of revenue from the industry and the payment of applicable taxes.
A trio of House and Senate Committees — Judicial, Health and Federal Affairs — chaired Tuesday’s hearing to analyze the bill that reaffirms the ban on recreational cannabis use and creates the legal structure to address medicinal cannabis use and sales.
The bill that originated in the governor’s office, establishes the medicinal and scientific research for cannabis in accordance with the federal regulatory framework, creates the Cannabis Regulatory Board, outlines is powers and duties, and establishes a strict control structure.
During the hearing, Manuel A. Laboy-Rivera, secretary of Economic Development and Commerce, defended the approval of Senate Bill 340, saying that in addition to the revenues that this law could generate for the island, “the benefits of its economic impact would be strong.”
Citing data from “New Frontier Data,” Laboy-Rivera said it is estimated that the sale of medicinal cannabis in the United States will increase from nearly $5 billion in 2016 to more than $13 billion by 2020.
“We’re confident that the adoption of this measure in Puerto Rico the investment landscape will be replicated, creating jobs and revenues for the government generated by this industry in the U.S.,” he said.
“In addition to treatments to benefit patients suffering from certain medical conditions, including chronic and terminal illnesses,” he said, adding an analysis of the economic impact the industry would have on Puerto Rico should be broadened.
“Once the legal and regulatory framework proposed by this bill is approved, Puerto Rico can be inserted quickly in the industry as a competitor of the highest caliber, because we have the ideal infrastructure, human capital and weather conditions for research, development, planting, manufacturing, distribution and sale of medicinal cannabis,” Laboy-Rivera said.
“We have the ability to convert Puerto Rico into a destination for everything related to the industry, including new investment of small and medium-sized local and foreign companies, innovation, science and technology, and a flow of foreign patients,” he said.