As legalized marijuana is adopted in different forms across more and more states in the U.S., it’s more evident that an examination of the local, state and national economic effects from these adoptions is needed. In New York for example, governor Andrew Cuomo is expected to push for legalizing recreational marijuana in the first 100 days of his third term at some point in 2019. “Let’s legalize the adult use of recreational marijuana once and for all,” he stated in a speech proposing a move towards legalization which is projected to generate a total tax revenue between $248.1 and $677.7 million for the state in its first year alone. Proposals of where to spend the excise tax revenue from Cannabis suggest using it to ameliorate New York City’s dilapidated transit system.
Legalizing and regulating recreational Cannabis dispensaries elsewhere, have generated comparable amounts of tax revenue to analyze. Colorado, one of the first states to permit recreational use of Cannabis in 2014, has earned over $862 million dollars in total tax revenue since that year. The surplus of extra tax revenue is allocated to help supplement funding for various state programs such as public education, healthcare, infrastructure projects, public transportation and substance abuse prevention. Colorado has also benefited from a “Cannabis tourism” boom as people travel to states that legalized Cannabis to use for recreation. Cannabis startups that are quick to adapt to the new industry ( airTHC, a Airbnb spin-off for instance) have started rental services that connects tourist to marijuana-friendly vacation spots. Washington (the first state to legalize marijuana) has seen similar gains in tax money and job creation as well as in Oregon, which saw over a 10% decrease in violent crime and murder rates. Across the United States, more dispensaries for adult-use are cropping up. Massachusetts is in the midst of adding 3 more recreational stores in early 2019 for a total of 8.
On the national level, sales from legal marijuana were at $6.7 billion in 2016, $9.5 billion in 2017, and projected to be at over $20 billion by 2021. Of course, federal legalization could bring in much more ($131 billion by 2025 according to estimates) tax revenue and add thousands of more jobs to the national economy. The growing recreational (and medical) Cannabis market has also provided new opportunities for investors. News of Cannabis becoming legal in Canada increased the market value of many different Cannabis companies allowing investors to profit from the Cannabis industry and the same would happen in the U.S. The financial gains that investors make from the Cannabis sector of the equity market has benefited the federal government (and more so if the government legalized marijuana) who collects a portion of the profits from investors through the capital gains tax.
The cost imposed from recreational Cannabis retailers and dispensaries is negligible compared to the benefits they provide for local economies, state governments and the health of citizens around the country. With polls showing public support for recreational adult-use growing, and more states allowing legal usage, nationwide legalization is moving closer.