In the United States, marijuana, also known as cannabis, is the most frequently used illicit drug. As a result, states are moving to legalize cannabis, even though it is still illegal under federal law. From recreational use in states like Colorado and Maine to medical use in New Mexico and Florida, states are passing legislation to legalize cannabis.
Analysts predict the marijuana industry’s worth every year. And year on year, that number exceeds all expectations.
In 2021 the annual recreational cannabis sales peaked at an astonishing $8.7 billion, and it is now predicted that by 2025 the industry will be worth a reported $35 billion.
So what does this mean for the economy? Read on as we take a deeper look into cannabis and the economy.
Economic Benefits Of Legalizing Weed
There are many benefits of marijuana on the economy. For one, it would create jobs. A nonpartisan Congressional Budget Office report found that legalizing cannabis could create up to 1 million new jobs in the United States. And those aren’t just low-paying jobs; according to the same report, legalization would also generate $28 billion in tax revenue.
Another economic benefit of legalizing weed is that it would save money. According to the Drug Policy Alliance, enforcement of marijuana laws costs the U.S. government $3.6 billion every year. If cannabis were legal, those funds could be used for other purposes, such as education or infrastructure.
Marijuana And The Economy Tax Revenue
In addition, legal cannabis would generate revenue for state and local governments. A report by New Frontier Data found that in 2016, legal cannabis sales generated $ 655 million in tax revenue for states. And that number is expected to grow to $1.8 billion by 2020.
Finally, legalization would also have a positive impact on the agricultural industry. According to a report by the National Cannabis Industry Association, the legal cannabis industry could create up to 1 million new jobs in the agricultural sector.
So as you can see, there are many economic benefits of legalizing weed. But what about the negative effects?
Negative Effects Of Legalizing Weed
There are also some negative effects of legalizing weed. For one, it would increase the use of cannabis. A study by the RAND Corporation found that if cannabis were legal, use would increase by 8-10%.
It would also lead to increased traffic accidents. A study by the Highway Loss Data Institute found that states with legal, medical marijuana saw a 3% increase in traffic accidents.
Legalizing Recreational Marijuana Use
Now that we’ve looked at the pros and cons of cannabis legalization, let’s take a look at how it would impact the economy if recreational marijuana use were legalized.
According to a report by New Frontier Data, if all 50 states legalized marijuana, it would create 1.1 million new jobs and generate $131 billion in tax revenue.
The report also found that if just 10% of the U.S. population used cannabis, it would generate $24.1 billion in tax revenue. And if all 50 states legalized recreational marijuana, that number would jump to $131 billion.
Learn more about cannabis law and policies with our Executive Program.
Implications Of Legalized Cannabis For Businesses And Consumers
The implications of legalized cannabis differ depending on whether you are a business or a consumer.
For businesses, the most obvious implication is that there will be an increase in demand for their products and services. Businesses will need to be able to meet this increased demand.
They will also need to be aware of the changing laws surrounding cannabis and ensure they comply with them.
For consumers, the implications are primarily positive. They will have greater access to cannabis and will no longer have to purchase it from the illegal market. This could lead to lower prices and better quality products.
Learn more about the various aspects of the marijuana industry with the Cleveland School of Cannabis.