Cannabis Legalization: Key Economic Benefits to Know

The legalization of cannabis has a significant impact on state economies as well as the federal budget.

FREMONT, CA: Over the past several years, states have voted to decriminalize marijuana, legalizing it for medical and recreational use and creating a thriving industry in the process. State legislation on the subject remains highly polarized. An increasing number of states are pushing to legalize marijuana. The legal changes have produced a flourishing economy of legal cannabis enterprises, including those aiming to research and develop cannabis-based medical treatments and those attempting to distribute and cultivate marijuana.

The use of cannabis products for medical and non-medical purposes permits the use of cannabis products for personal or recreational usage. At the federal level, president Biden pardoned all former federal convictions for simple possession of marijuana and requested a reassessment of marijuana's current status as a schedule-restricted narcotic. These activities could pave the path for nationwide decriminalization. As the states have shifted their legal stances, the economic benefits of legalizing marijuana have already become apparent.

Influence on tax revenues: Marijuana sales over the previous years have generated robust tax collections. States collectively collected more than $1.7 billion in tax revenue. Total payment in dollars had more than doubled. For legal, adult-use cannabis sales, the total gain for all 50 states reached $3.7 billion, excluding cash collected for state budgets and municipalities. Marijuana has become federally legal; the economic rewards may be extraordinary. According to an estimate by cannabis analytics firm New Frontier, federally legalized marijuana may produce an additional $105.6 billion in federal tax revenue by 2025.

Income and employment: The first stage for states favoring medicinal marijuana would establish marijuana nurseries and dispensaries. Creating jobs would lay the set for economic activity in the cannabis business in these regions. As the industry has matured, the economic impact has grown more tangible in California and Nevada, where such infrastructure already exists. According to research by RCG Economics and Marijuana Policy Group, legalizing recreational marijuana in Nevada may sustain over 41,000 employment through 2024 and create over $1.7 billion in labor income. The occupations likely make by the rapidly expanding industry that will emerge across the country.

Investment opportunities: Local and national economies stand to benefit significantly from the legalization of marijuana, and it could also assist in securing the investment portfolios of domestic and international investors. As long as marijuana remains federally illegal, investors can't benefit from the industry's growth. Although investors can work via over-the-counter exchanges, many of the most successful enterprises in the early legal cannabis market. Marijuana companies could list their stocks on all U.S. exchanges, increasing liquidity and providing access to a larger pool of investors. If the cannabis market continues to grow at the same rate as it has in previous years, investors are sure to take a great interest in the sector.