As the trend toward legalizing marijuana continues to sweep across the United States, new research is showing that the expanding cannabis industry is having a positive financial impact on communities who opt to make it legal. As the industry gains further support and more states and communities make marijuana legal, this will lead to greater and greater revenues.
Legal Cannabis Case Study From Colorado
A study released in 2018 from Colorado State University-Pueblo’s Institute of Cannabis Research focuses on the industry’s impact on Pueblo County, CO. The research found that legalizing marijuana had positive economic ramifications on Pueblo County, even after adjusting for increased costs associated with bringing cannabis to the legal side of the law. The study shows that:
In 2016, Pueblo County’s legal marijuana industry generated more than $58 million in total revenue
Legal marijuana lead to increased associated costs of $23 million
Legalized cannabis resulted in a net gain for the county of more than $35 million
Those are pretty impressive numbers! What’s more, the findings estimate an increase in net gain for Pueblo County of nearly $100 million by 2021!1
Legal Marijuana Beyond Colorado
So, legalizing weed worked in Colorado, but what about the bigger picture? Will legal cannabis ever be available in all 50 states? And if so, will it have a positive or negative effect on the country’s economy? One place for answers to these questions can be found is a report released by New Frontier Data, a leader in analyzing data regarding the legal cannabis industry. In a report published in 2018, NFD examined many aspects of legalizing marijuana in all 50 states.2 Here’s what it found:
- Legalizing marijuana in all 50 states today would create thousand of new jobs. Specifically, the country would see in excess of 654,000 jobs created, and this number would increase to 1 million jobs created by the year 2025.
- Legalization of the cannabis industry on a nationwide scale would result in increased business and payroll taxes of roughly $3.3 billion. This amount would grow to $5.3 billion by 2025.
- A theoretical 15 percent federal sales tax placed on legal marijuana would result in revenues of $46 billion between 2017 and 2025.
- The total tax potential of legalizing cannabis at a national level is estimated at $105.6 billion between 2017 and 2025.
As you can see, these numbers are impressive. It’s clear that properly regulated and taxed legal marijuana would have positive ramifications for the economy as a whole.
So Why Isn’t Cannabis Legal Everywhere?
This is an excellent question and one that’s not easy to answer. The data shows the positive effects of legalizing marijuana, but there are still negative misconceptions surrounding cannabis. One leading misconception about marijuana is the idea that its use contributes to societal problems such as crime and homelessness. But is this true? The Colorado State University-Pueblo report mentioned earlier goes a long way toward dispelling this myth. The researchers involved found very little evidence to support these negative arguments.
One primary concern for community residents is that the presence of legal cannabis outlets will negatively impact property values. This misconception is disputed by a study on Colorado communities that have legalized marijuana and allowed retail shops to open. What it found was just the opposite of what everyone feared. Instead of lowering property values, the presence of legal marijuana outlets actually led to an increase in home values of about 6 percent.3
So what’s the take away from all this? Obviously, the nation’s perception of marijuana is changing. Today, people are taking an objective look at cannabis and asking good questions. This trend will continue into the 2020s, and more and more states will legalize marijuana as the benefits become clear. It’s safe to say, that legal cannabis has a bright and prosperous future.