The Economic & Business Impact of Marijuana
When a state authorizes the sale of marijuana for medical and recreational purposes, a huge economic benefit follows. This is a conclusion from many researchers after analyzing numerous economic factors in recent years. In particular, employment rates, real estate values, and tax revenues increase with the approval of marijuana for medical and adult purposes.
The establishment of agricultural and manufacturing facilities, outpatient clinics and retail shops to support the marijuana industry, many jobs have been created. The cannabis supply chain hs created a lot of business opportunities for marijuana entrepreneurs. Hundreds of workers are needed to maintain the industry. These include accountants, lawyers and many more.
Employment Benefits from the Marijuana Industry
It is estimated that the cannabis industry employed between 165,000 and 230,000 full-time and part-time workers in the United States in 2017, and ArcView Market Research predicts that this number will increase to more than 400,000 by 2021. According to the Alliance drugs Policy Alliance report, the number of direct jobs generated by the marijuana industry in Colorado, Oregon, and Washington exceeds 10,000, and auxiliary jobs add 10,000 or more per country.
Real Estate Benefits from the Marijuana Industry
Based on these data and future forecasts, it is clear that state economies will benefit from the regulated cannabis economy.
Countries that legalize marijuana for medical and recreational purposes see a significant increase in property values and rentals, where marijuana farmers, manufacturers, clinics, and merchants can work. Due to the strict legal regulations enforced in many areas, marijuana companies have limited real estate options where they can build their facilities. Hosts understand this and face numerous risks when renting to marijuana-related businesses. As a result, rent prices and real estate values are skyrocketing. For example, in Denver, Colorado, the average rental price for marijuana facilities has increased from two to three times the average rental rate between 2014 and 2016, according to CBRE Research.
Tax Benefits from the Marijuana Industry
One of the easiest ways to monitor the economic benefits of the marijuana industry for countries and local municipalities is to look at tax revenues. Especially in states that have legalized both medical and recreational usage. Cannabis users tend to pay much higher taxes on marijuana for medical purposes. Some countries do not impose marijuana taxes when used for medical purposes, but it's not unusual for recreational marijuana to be taxed heavily (excise duty, state sales tax, and local tax) at rates ranging from 15% to 37%.
The taxes collected by the states and local municipalities are used for the following purposes:
- financing community programs
- law enforcement,
- financing the costs of for marijuana programs in cities and states.
For example, the state of Colorado has collected more than $ 247 million in taxes from the marijuana industry in 2017. Each year, tax revenues from marijuana sales have increased. Among other countries that have legalized marijuana for recreational purposes, tax revenues are also significant. According to a report by the Alliance Drugs, in 2017, Washington State raised almost $100 million in taxes and Oregon raised nearly $20 million. Nevada raised over $13 million in taxes, while Alaska raised over a million dollars.
The Marijuana Industry Provides a Net Positive Economic Benefit
The data show that the marijuana industry has a positive impact on states and municipalities by creating more jobs, increasing real estate values and generating tax revenues for various purposes.
However, there are costs associated with marijuana programs. Do the economic benefits outweigh the costs?
Researchers at the Cannabis Research Institute at Colorado State University decided to answer this question when they investigated the economic benefits of marijuana for Pueblo County in Colorado. Researchers have found that the marihuana industry provides a net economic profit to the county,
In total, the marijuana industry generated a positive economic impact of $58 million in Pueblo County in 2016, while incurring costs of $23 million. As a result, the net positive effect was $35 million. The researchers estimate that the net impact in Pueblo County will be close to $100 million by 2021.
In conclusion, data show that the marijuana industry has a positive economic impact on national and local communities. Only time will tell if this impact will remain positive for the long-term.