Marijuana legalization is a trending episode and a major topic of debate among government organizations, social activist groups, medics, politicians, business class, scholars, researchers, and potential consumers.
Health benefits of medical marijuana top as a core advantage stemming from marijuana legalization. The unfortunate part of cannabis story is the tight legislation frustrating efforts to legalize marijuana.
Although marijuana is illegal in most states and countries across the world, the black market is blossoming.
A hard truth remains that people will keep selling cannabis with or without government regulations. It therefore remains within the jurisdiction of government policy makers to decide whether to welcome marijuana taxes and benefit the health of their people by legalizing marijuana or to watch as the black market thrives in billions of dollars.
Until governments legalize marijuana, they should not expect a slice from the enormous tax returns that marijuana could potentially pump into the crumpling economies.
It goes without say that; marijuana legalization is an agent of economic growth and development. Although rooted controversies surround legalization of cannabis, policy makers should weigh out the pros and cons to make informed decisions.
For countries and states that legalize marijuana, here are some economic benefits they should expect.
1. Stable economic environment
Legalizing marijuana can stabilize the economic environment of the legalizing country or state. If countries legalize marijuana, they can control the product supply. They can also tame the black market that is collecting billions of dollars without a pie to the national economy.
States prohibiting marijuana invest a lot of capital to restrain sale of marijuana in illegal markets. Truth be told, no matter how much countries invest in fighting illegal marijuana, the battle is still tough to win.
Massive sale of illegal marijuana drains monetary resources from the consumers who make the larger part and concentrate them in the hands of a few people. In due course, an imbalance in monetary supply can cripple the economy by inducing uncontrolled rates of inflation.
2. Increased Savings
How much do countries spend fighting illegal marijuana? The federal government spends more than $3 billion a year to in marijuana enforcement. In 2013, American Civil Liberties reported approximate costs of $3.6 billion.
If more states would legalize cannabis, the cost of marijuana enforcement would be lower and would save the country billions of dollars.
The federal government has not legalized marijuana. The day it will legalize its use at the national level, marijuana enforcement costs will reduce drastically.
Removing marijuana from the register of controlled substances would mean fewer court battles and would yield more savings.
Countrywide marijuana legalization would also reduce the overall prices of cannabis. It may be bad news for profit-oriented marijuana companies but it will be good news for customers seeking marijuana for health benefits as they access the commodity at lower prices.
3. Broad Investment Opportunities
Illegality of marijuana is a deterrent to potential investors. The opportunities for cannabis investment are infinite and can benefit both the national and state governments.
Although most state governments are legalizing marijuana, the illegal take at the federal level dims the hope of investors reaping full benefits from investing in weed.
Only a handful of cannabis companies list their stocks in the public domain. National marijuana legalization will open the door to many marijuana companies to list their stocks in all U.S. stock public listings.
Recent years have a record of persistent growth in the marijuana industry. If such growth persists, investors would be more likely to invest in marijuana stocks.
Marijuana legalization will increase confidence in investors and assure them of safe investments to avoid situations where they would run into problems with authorities.
4. Job creation and income generating opportunities
Almost all economies of the world are battling with increasing rates of unemployment. Marijuana legalization would open the door for jobs and incomes.
Voting for medical marijuana permits issuance of licenses to set up marijuana dispensaries and nurseries. These activities will create jobs in the pot industry and stir economic activities.
The pot industry in Nevada and California has recognizable economic impacts.
A Nevadan study by RCG Economic and Marijuana Policy Group estimates a labor income of over $1.7 billion and creation of over 41,000 jobs by 2024 from legalization of recreational marijuana.
A study by the same organization in California estimates over 81,000 jobs and labor income increase of over $3.5 billion in California from legal marijuana sales by 2024.
A study by New Frontier estimates a creation of over 1.1 million if the federal government will legalize marijuana across the nation by 2025.
Growth in the cannabis industry would require laborers in farming units, processing facilities, distribution channels, and marijuana dispensaries and other retail outlets.
5. Tax revenues
Illegal marijuana sales swallow a lot of money that would go into tax revenues were the federal government to legalize marijuana.
Washington and Colorado states are some of the states swimming in buoyant tax revenues. Recreational and medical marijuana fees and taxes contributed over $135 million in 2015. Total sales were almost one billion dollars at $996 million.
In 2016, marijuana market value was at $6.7 billion in North America and in 2021, it could be $20.1 billion.
New Frontier projects an additional tax revenue of $131.8 billion if the federal government would legalize marijuana.
6. Expansion of E-commerce Industry
Legalizing marijuana is opening up the e-commerce industry for marijuana products. Giant e-commerce platforms like Shopify are already allowing CBD sellers to create store on the platform.
E-commerce is the future of the business industry. Legalizing marijuana would motivate more potential businesses interested in marijuana businesses to create stores on various online store to reach out to their potential market.
Successful marijuana e-commerce businesses have a positive impact on the economy because they facilitate business growth, increase sales, and the potential to generate revenues.
7. Growth of Other Businesses
Marijuana is not a self-sufficient business. It relies on other businesses for survival. For instance, marijuana relies of technological innovations to sustain growing marijuana in controlled environments.
Legalizing marijuana would open up business growth for business that supply the requisites for farming, harvesting, and processing, packing, distributing, and marketing marijuana products.
Economies grow when businesses grow.