A report published by Marijuana Business Factbook showed that American cannabis businesses could contribute up to $130 billion to the economy come 2024.
The estimated figure stands strong at 181 percent increase from 2019’s projection of $46 billion. The journal indicates how massive cannabis sales can do for the economy, as regulations and laws relax over the years.
Additionally, there’s also the impact of the transition from the illicit market to the mainstream juggernaut, providing new business opportunities and jobs. As more dispensaries open, more people can get jobs, and this potentially impacts the country.
While the COVID-19 pandemic poses uncertainty for the pop-ups, stores, and online sellers, the journal said the cannabis industry can remain strong. Short-term disruptions don’t derail the marijuana sales, now that people are buying more online.
Marijuana’s economic impact will remain relevant, as revenue is continuous, and businesses permeate through American communities, cities, and states. The Marijuana Business Factbook used the economic multiplier 3.5 to measure the impact or contribution of marijuana to the economy of the United States.
In this sense, every $1 spent by the consumer or medical marijuana patient, an additional $2.50 of economic value is injected into the economy. This is only an example, and people, especially patients, rely on marijuana for ease and recovery. For this, more patients are spending money just to get their supply of cannabis.
More than sales, cannabis also brings about tourists who are advocates of the wonderful plant. The Marijuana Business Factbook mentioned how tourists visit some states just to purchase and consume marijuana goods—from CBD, THC, to buying organic strains, etc. While traveling across the country, these tourists spend money on hotels, food, tours, car rentals, and many more.
In California, tourists are free to buy cannabis as long as they have proof that they are at the legal age of 21 years old and above. Legal dispensaries allow up to a maximum of 8 grams of concentrated cannabis at a time.
The United States, by legalizing marijuana, also benefits by attracting more investors and advocates. More cultivation sites are built, and manufacturers triple in number, delivering high-quality cannabis across the country. Many of these companies hire locals and growers who can gain more from the partnership.
Finally, the journal also mentions how cannabis businesses contribute to the economy by paying millions for taxes. Government programs and projects are funded by these taxes, creating more roads, hospitals, and providing education for the poorest of the poor.
Impact on Tax Revenue
Going deeper into the aspect of taxes, marijuana businesses in Colorado and Washington are paying $300 million in taxes for the recreational marijuana market. More people come to these states to enjoy recreational cannabis, which means the sales are undeniably higher compared to other states.
Last year, the collective sales of marijuana reached $1.7 billion in Colorado and $12.2 billion across the country. The taxes ballooned to millions of dollars yearly and is expected to increase to $3.1 billion in 2024.
Experts and researchers back the progressive market, citing that legal cannabis contributes more than $80 million to the US economy in 2017. The country benefited from the sales, and if more states will legalize marijuana consumption, the market can contribute up to $105.6 billion in federal taxes by 2025.
Taxes like exercise tax, cultivation, and sales tax are among the fees collected by the federal government. It was recorded that in January 2018, California’s cannabis sales generated more than $400 million in exercise tax, $98 million in cultivation tax, and $335 million in sales tax. Adding everything up, California generates close to a billion dollars for marijuana taxes.
Other states like Massachusetts also reported a massive tax collection of $393.7 million for the first year of opening the marijuana retailers in the state.
Significant Job Growth
The New Frontier Data revealed that there are 340,000 total jobs created in the United States by the cannabis industry. Compared to 2018, there’s an increase of 30 percent to the generated jobs last 2019. The company also projected that this figure will double to 743,000 come 2025.
New Frontier Data’s projection will still increase if the market will be legalized federally. Hence, if this scenario is considered, around 1.63 million more jobs could rise in 2025—four times bigger the current number of data that the United States has.
The emerging trends and transition to online purchases can also contribute to more sales for marijuana companies. At the time of the pandemic, some people may have decreased their expenses for recreational marijuana, but there are also patients who need a continuous supply of cannabis. Because of this, sales remain consistent, and people situated in legal markets enjoy hassle-free delivery services.
Speaking of jobs, people with the right skill set to work in cannabis companies earn more than regular employees. According to Fortune, a dispensary manager earns around $68,000 per year, which is an $11,000 boost from a manager from a fast-food chain. Budtenders, those who offer suggestions to customers and handle the products earn a minimum of $32,000 a year.
More Advantages for the Government
The increased taxes generated from the cannabis industry is a great argument to push for wider legalization. If people are spending more on cannabis supplies, companies have better sales, which in turn benefits the government.
Most companies find it harder to expand and grow in some states because of the set regulations and laws, and these things counter the benefits. By legalizing marijuana in other states, more companies can open their doors to consumers, allowing a bigger force in the industry.
Experts and researchers call this innovation, reaping the long-term benefits of legalizing marijuana. Companies can create more jobs, attend to Americans’ needs, and further the taxes for the benefit of the citizens.
If the United States will promote wider marijuana use, the country can spark the attention and interests of investors from across the world.