The 2016 election season has finally ended. While it was a tumultuous journey leading to a devastatingly disappointing ending for many, California, Nevada and Massachusetts managed to come away with a small consolation prize. These are the states in which the ballot question concerning the legalization of recreational marijuana, or “Question 4,” was passed. While the public opinion about marijuana is widely varied, the economic benefits cannot be ignored. The marijuana industry in Colorado alone added 2.4 billion dollars to the state economy, surpassing over 90% of other industries in the state.
In many of the states that passed Question 4, there have already been prominent marijuana influences. California, for example, partially due to the large medical marijuana program, would stand to gain a lot from the legalization of recreational marijuana. The revenue generated is generally from sales taxes, similarly to cigarettes or alcohol. Bringing marijuana out of the underground market will allow states to tax the heavy quantities that are probably already being sold. According to some estimates, Arizona is projected to generate 114 million dollars in revenue generated from medical marijuana alone. Because recreational use is still illegal in Arizona, a large portion of the market remains untapped, but the legalization of medical marijuana is a significant step in the right direction for increased economic prosperity.
The marijuana industry also contributes to the economy in other ways. For one, the industry is a major creator of jobs. Colorado created over 18,000 jobs in the marijuana industry in the short time so far that it has been legalized. The sale of recreational marijuana has also been linked to increased stimulation of the economy. Areas in which marijuana is legal reportedly have increased activity, meaning there is more money being spent at local businesses. It is estimated that every dollar spent in the marijuana industry leads to between $2.13 and $2.40, and incredibly high multiplier for a commodity.
It is too early to make any judgment as to how successful the industry will actually be in the newly legalized states, but it is definitely a big economic opportunity. Hopefully these states will utilize the industry to support state programs such as schools and health care, showing the possibilities of the industry to other states. And even if it doesn’t, hey at least weed is legal.