The call to legalize online weed in the US is growing. In November 2020, Arizona, Montana, South Dakota, and New Jersey voted to legalize recreational pot. About fifteen states have legalized recreational weed. More than half of the US states have laws in place for medicinal cannabis. Mississippi is the latest to join them.Compared to this, marijuana in Canada was approved for medicinal use as far back as 2001 and recreational cannabis got approval in 2017.The legalization of cannabis has had an impact. A blossoming industry of companies involved in R&D to develop medicinal marijuana, and others who grow and distribute legal cannabis have mushroomed. Growth in the cannabis industry has economic benefits which are as follows:
Increase in Jobs and Earning
Legalizing weed would entail setting up nurseries and farms to cultivate and grow marijuana. Processing, distributing, and selling cannabis products would then follow. All of these require people, creating jobs leading to earnings.A California study projected 81,000 additional jobs due to the legalization of cannabis. This could lead to an increase in labor income by $3.5 billion. Another study in Nevada suggested weed-related labor income rising to $1.7 billion or more with jobs growing to over 41,000 by 2024. Yet another study suggested that legalizing cannabis in the US could generate a million jobs by 2025.
Effect on Revenue from Tax
Increasing revenues from fees and taxes on recreational and medicinal cannabis are enticing other states to follow. A 2019 study in California pegged cannabis-related sales at more than $1.7 billion, with tax revenue of over $302 million. A Massachusetts report from 2019 said gross sales in the first year of legalizing weed was $393.7 million. An earlier study from 2018 in California suggests the generation of $335.1 million from sales tax, $411.3 million from excise tax, and $989 million from tax on the cultivation of weed.
Taking cannabis off the list of controlled substances could result in tremendous savings. A 2013 report suggested the cost of marijuana enforcement was $3.6 billion per year. As the number of states that legalize marijuana increased, the cost of law enforcement for cannabis-related issues would decrease. If marijuana use was legalized, it would result in fewer arrests, court cases, and people imprisoned due to weed-related issues. This would save money.Another source of saving could be from the sale of cannabis. Legal cannabis prices can be quite high at the moment. If marijuana use is made legal, the prices of cannabis products could go down. This would benefit the people using these products. It could also benefit companies creating these products as sales could go up.
Opportunities for Investment
Very few cannabis-related companies trade on stock exchanges in the US as weed is still illegal at the federal level. Marijuana in Canada is legal and many companies have already benefitted from this. Investors are allowed to trade on cannabis-related companies in stock exchanges in Canada. If the US legalizes the use of weed, marijuana-related industries could put their stock on the stock exchanges. This would attract more investors.Though there are still many opposed to making marijuana use completely legal in the US, the economic benefits of legalizing cannabis are substantial enough for people to take notice.