Marijuana enthusiasts have been cautiously excited about the pace of legalization, but they’re not the only Americans poised to benefit from new policies. According to the Marijuana Business Daily, the economic impact of weed could hit $44 billion by 2020 if current trends continue.
These numbers are based on the assumption that every dollar of money spent directly on marijuana yields an additional $3 of economic growth. This growth includes money spent in marijuana-related companies, taxes and even increased real-estate values as weed-friendly communities become more attractive to homeowners.
Colorado and Washington were the first states to legalize recreational marijuana in 2012. Legalization passed by the Obama administration in 2013 allowed these states to implement legalization law. This led to a slew of recreational legalization, decriminalization and medicinal use legalization across the country. The rest, as they say, is history.
In 2014 and 2015 Colorado collected nearly $6 billion in revenue. Washington State saw $67.5 million the first year following legalization and expects the new policy to have brought in over $1 billion by 2019.
In 2014, Oregon and Alaska joined the full-legalization bandwagon. The first month of state revenues in Oregon exceeded expectations at nearly $3.5 million. Alaska hasn’t gotten started yet, but expects anywhere from $5 billion to $20 billion in state revenue annually. Washington, D.C. has also voted to legalize recreational marijuana, but sales won’t begin until 2017 at the earliest.
An additional 19 states have legalized medical marijuana. California brings in between $59 million and $109 million in tax revenue each year. Arizona sees about $2 billion and New Mexico collects around $650,000.
These numbers only calculate revenue; they don’t include money saved. The California Attorney General’s Office estimates that legalizing recreational use of the drug could save “hundreds of millions of dollars” in spending on law enforcement, incarceration and court costs.
The icing on the cake, however, is not tax revenue but economic rejuvenation. In Colorado, an entire marijuana-based economy has popped up. At least 10,000 jobs have been created and many of them pay higher than minimum wage. Washington and Oregon are also seeing the beginnings of a marijuana-related employment boost.
A number of online services matching workers with potential employers in the industry have sprung up to help the industry along. Job board Weedhire.com boasts over 8,000 users. Nearly 1,000 jobs are currently advertised on the site and numbers are only expected to rise.
Of course, legalization activists and naysayers are still arguing over the net impact. Proponents of legalization in Ohio promise up to 35,000 new jobs and billions in state revenue. Opponents counter that no amount of job creation is worth the cost. “We’re going to flood this state with opportunities to get high,” warns Roger Geiger of the National Federation of Independent Business Ohio.
Our national legal framework also is on shaky ground. The 2013 decision to allow state sovereignty over marijuana policy is dependent on each state’s ability to keep the local industry under control. This includes preventing drug routes from impacting neighboring states. Nebraska and Oklahoma have already filed lawsuits against Colorado. They argued that the state’s marijuana policy increased illegal sales in their jurisdictions, placing undue strain on their law enforcement officials.
The Supreme Court’s recent rejection of these lawsuits is a definite win for legalization advocates, but a new administration could slow or reverse the pro-legalization policy experiments in the states.
Erin is a freelance writer, photographer and filmmaker. She is passionate about moving beyond party politics to identify pragmatic solutions to social, economic and political problems. Her writing has appeared in the Washington Times, the American Spectator, Doublethink and Scuba Diver Magazine. She spends her free time scuba diving, snowboarding and ravenously reading popular nonfiction. Erin holds a master’s degree in International Political Economy from the London School of Economics.