Benefits of Legalizing Marijuana For Economic
While the Presidential election was the most prominent news story in November 2020, there were different important decisions to be made during the elections. In addition, elections were held in a variety of states to determine the future of legal cannabis. The four states of New Jersey, South Dakota, and Montana were able to approve marijuana for recreational usage, following Washington's model. Mississippi has also voted to permit Missouri medical marijuana.
In all, there are more states that have legalized marijuana to use for recreational or medicinal use. The effects have been massive. The legal changes have led to a burgeoning industry of cannabis-related companies that are legal such as those that seek to research and develop cannabis-based medical products, as well as those developing and distributing marijuana, and many more. Over half of U.S. states have laws regarding medical marijuana, and 16 states have approved marijuana for recreational usage.
As the first states to allow marijuana for legalization have declared their intentions The economic benefits have been clear. Overall, legalizing marijuana could bring about a massive boost to the state economy and huge sums for both the state and the federal governments.6 Below, we'll explore several of the main advantages of the legalization of marijuana for the economy.
Tax Revenue Impact
More than expected growth in marijuana sales in Colorado and Washington in recent years has resulted in buoyant tax revenue. In the year 2019, Colorado recorded over $302 million in taxes and other fees related to medical and recreational marijuana. The state's sales totaled over $1.7 billion.78 Revenues in the U.S were $12.2 billion in the year 2019 and forecast to grow to $31.1 billion by 2024 according to the report of Arcview Market Research and BDS Analytics.9 Local research supports this idea as well. A report from the Colorado State University-Pueblo's Institute of Cannabis Research recently concluded that the legal cannabis industry was responsible for more than $80.8 million to the local economy in 2017, predominantly through taxes and fees.10 Should marijuana be legalized at a national level, the economic benefits can be enormous According to a report from the New Frontier, a company that analyzes cannabis data New Frontier suggests that federally legal pot could generate an additional $105.6 billion in aggregate federal tax revenue by 2025.
That is the carrot presented to states across the country. It was reported that California's marijuana sales have brought in 411.3 million in excise tax, $98.9million in cultivation tax, $335.1million in sales tax12, according to the Massachusetts Cannabis Control Commission.13
Income and Jobs
The first step in the process for states that have decided to legalize medical cannabis would be the establishment of dispensaries as well as nurseries. These will not only provide jobs but also get the wheels in motion for the economic activity in the pot industry in these regions. For states such as California and Nevada with infrastructure that already exists, the economic impact has become more tangible as the industry matures.
A joint RCG Economics and Marijuana Policy Group study about Nevada discovered that the legalization of recreational marijuana could create over 41,000 new jobs and $1.7 billion in extra labor income.14 A ICF study found that legalizing marijuana sales would lead to at least 81,000 additional direct job opportunities, as well as indirect and induced in California. The study also predicts an increase in the total labor income by at least $3.5 billion.15
New Frontier's study on the potential impacts of federally legalized marijuana suggests that one million jobs may be created by 2025.11 The majority of this will come from the rapidly expanding industry that will pop up all over the country. Workers would be needed to process, farm distribute, sell, and process marijuana-related products. Furthermore, there could be ample opportunities for secondary industries which are connected to legal cannabis although not directly involved in its production and distribution. Software developers Construction, financial services, construction companies, and many more industries could be included.
Investment Opportunities
Legal marijuana could bring of tremendous benefits to economies at a local as well as a national scale. Legal marijuana can also help investors in the United State and abroad to protect their portfolios of investment. Even though marijuana is banned on a federal scale, it is possible for investors to benefit from the industry's growth. There are few marijuana-related companies trading publicly traded stock exchanges. Investors are able to use over-the-counter exchanges. However, the majority of those that excelled in the cannabis market were founded in Canada and other countries.
If marijuana becomes legalized on a national level, marijuana businesses will then be able to post their stocks on all U.S. Exchanges. This could increase liquidity and open the doors to investors. If the rate of growth for the cannabis industry continues to grow as they have done in recent years there is a good chance that investors will show a keen interest in the business.
You Save Money
It is crucial to think about the economic benefits of legalizing marijuana. This includes the potential revenue and the money which could be saved. At present, federal marijuana law enforcement costs several billion dollars each year. A report in 2013 by the American Civil Liberties Union found that the costs at that date were $3.6 billion each year.16 The more states that allow cannabis to be legalized, the less the costs of enforcement would likely be. However, if marijuana were to be legalized at a national level it is likely that these costs will be reduced significantly. If marijuana was removed from the list of controlled substances, significantly fewer court cases involving the substance would go through the courts, resulting in lesser incarcerations, which, that in turn, more funds saved.
Legalizing marijuana will also benefit users who consume cannabis-based products. It's possible that marijuana will become more legal in the U.S. This could lead to lower prices overall. Although this may not seem to be the best thing for tax revenues overall as well as for businesses that sell marijuana, it could turn out to be beneficial to firms looking to earn maximum profits. Cannabis-related products used by patients for treating their ailments could be greatly benefited by lower costs.
Key TAKEAWAYS
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The United States has seen an increasing interest in the legalization of marijuana for recreational and medicinal uses. Many states have implemented such laws.
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Legalization may be motivated by the potential income-generating benefits of legalized marijuana sales.
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Legalization is a major incentive due to increased revenue from taxes, the growth of jobs investments, and many more factors.
Bottom line
There is ample pushback against legalizing marijuana across the nation. The critics have cited confusion among law enforcement officers trying to keep up with the changing regulations, worries about young marijuana use and homelessness, and also the possibility that property values will decline. Many are opposed to changing marijuana's regulatory status because it would mean changes to the status established. All of these factors combine to make it less likely that marijuana will become legal at a national level in the near future. There are numerous reasons to legalize marijuana nationwide like the growing number of states that have decriminalized pot use in different ways, as well as the economic benefits.
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