Since the election in 2016, several states have held votes to determine the future of the legal cannabis industry in one form or another. Following Colorado and Washington, more and more states are moving to legalize marijuana for medicinal or recreational use, or both, and the impact has already been tremendous. As of now, more than half of U.S. states have medical marijuana laws on the books, and nine states have legalized certain quantities of marijuana for recreational use as well. So, what are the economic benefits of cannabis legalization?
Impact on Tax Revenue
Cannabis sales in both Colorado and Washington in the past several years have done better than anyone expected. Because of that, tax revenues rose significantly. According to Investopedia, in 2019, Colorado collected more than $302 million in taxes and fees on medical and recreational marijuana. Sales in the state totaled over $1.7 billion. In December 2019, it was reported that, since January 2018, California’s cannabis sales had generated $411.3 million in excise tax, $98.9 million in cultivation tax, and $335.1 million in sales tax.
Cannabis legalization presents the possibility of tremendous benefits to economies on a local and a national scale. If governments would legalize cannabis use, one of the benefits would be having marijuana stocks listed on reputable stock exchanges. Investors would have a chance to take advantage of the double-digit marijuana market growth. While marijuana remains illegal on the federal level, it is difficult for investors to capitalize on the growth of the industry.
Income and Jobs
Setting up cannabis nurseries and dispensaries would be the first step for the states that voted in favor of medical marijuana. These would not only create jobs, but also get the ball rolling for economic activity in the pot industry in these areas. New Frontier estimates that cannabis legalization would create at least 1.1 million jobs by 2025. These jobs will be created in cannabis farms, processing plants, distribution, and retailers. Even other industries like consulting firms, finance and lending industries, and many more will have a chance to hire more employees.
The economic benefits of cannabis legalization have already been apparent in recent changes. Legalization could mean a big push for state economies and big bucks for both the state and the federal governments. By the end of 2019, the US sales of marijuana had reached $12.2 billion and are expected to increase to $31.1 billion by 2024. As more states move to individually decriminalize cannabis use in various ways and as economic benefits take effect, nationwide legalization will become more likely.
If you’re interested in getting involved with the cannabis industry, contact Canna Business Services for cannabis consulting, investing, and marketing assistance.