recreational cannabis could be legally purchased in 11 states, and an additional 7 had passed recreational cannabis laws. Tax revenue from recreational cannabis was more than $1.6 billion in 2020 for 9 states that report revenue data. 1 This revenue comes from excise taxes on recreational cannabis that are in addition to the general sales tax. Although some of this revenue is dedicated to substance misuse prevention and services in many states, little to none is dedicated to offsetting the

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... tial mental health consequences of cannabis legalization. In this Viewpoint, we argue that earmarking recreational cannabis excise taxes for investments in mental health is an appropriate strategy to minimize the potential mental health consequences of cannabis legalization (eg, increased risk of psychological distress and schizophrenia) 2-4 while preserving potential benefits (eg, reducing the disparate impact of cannabis-related arrests and incarceration on Black and Hispanic communities). 5 What Are Excise and Earmarked Taxes, and When Are They Appropriate? An excise tax is a tax imposed on a specific good or activity, like tobacco or indoor tanning. An earmarked tax is a tax for which revenue is dedicated for a specific purpose. 6 There is generally consensus among tax scholars that it is only appropriate to earmark excise tax revenue for spending initiatives that offset externalities associated with the use of the good or engagement in the activity (ie, when an individual's use of the good or engagement in the activity produces consequences for others or society). By this standard, it would be appropriate to implement excise taxes on recreational cannabis and earmark revenue for mental health services and systems. 3] [4] These mental health problems have social and financial costs for society (ie, produce externalities). Earmarking a proportion of recreational cannabis excise tax revenue for mental health would also be consistent with how alcohol and tobacco excise taxes are earmarked for substance misuse prevention and treatment in many states. Current Status of Excise Taxes and Earmarks Related to Recreational Cannabis and Mental Health As noted in a recent Tax Foundation report, excise taxes on recreational cannabis are generally not earmarked in ways that meet standards of appropriateness because "revenue is dedicated to either unrelated spending programs or the general fund." 1 Of the 11 states where recreational cannabis could be legally purchased in April 2021, only Illinois, Oregon, and Washington explicitly mention mental health in the statutory language that earmarks excise tax revenue. In all 3 states, however, mental Author affiliations and article information are listed at the end of this article.