THE ECONOMIC BENEFITS OF LEGALIZING MARIJUANA
1. INTRODUCTION
In recent years, many states in the United States have changed their laws to allow marijuana use for medical or recreational purposes. As of 2024, 37 states and Washington, D.C. have legalized marijuana in some form. This has led to the growth of many businesses that grow, sell, and research marijuana, such as twdshop.co, an online platform for cannabis products. These businesses bring in tax money for the government and create new jobs, boosting the economy.
2. KEY POINTS
Marijuana is becoming legal in more states for both medical and recreational purposes.
Legalization helps the economy by increasing tax revenue, creating jobs, and attracting investors.
The United States government still does not fully legalize marijuana at the federal level, but changes may come in the future.
Marijuana dispensaries create thousands of jobs across the country.
Legalization can also save money by reducing law enforcement costs related to marijuana.
3. FEDERAL STANCE ON MARIJUANA LEGALIZATION
The United States federal government still does not fully support marijuana legalization. However, there have been some positive steps toward change. In October 2022, President Biden pardoned people who had been convicted of simple marijuana possession under federal law. He also asked the Department of Justice to review marijuana’s classification as a dangerous drug.
Even though the federal government has not fully legalized marijuana, each state can decide its laws. Some states allow both recreational and medical marijuana use, while others only allow it for medical reasons. A few states still do not allow any marijuana use at all.
4. HOW LEGALIZATION HELPS THE ECONOMY
4.1 INCREASE IN TAX REVENUE
One of the biggest benefits of legalizing marijuana is the tax money collected by the government. In 2023, the total tax revenue from marijuana sales in different states was over $4.18 billion.
Some of the states that collected the most tax money include:
California: Over $1.1 billion in sales tax from marijuana
Washington: $4.1 billion collected from 2014 to 2023
Colorado: $2.38 billion in tax revenue from 2014 to 2023
When states collect more tax money from marijuana sales, they can use it to improve public services like schools, roads, and healthcare.
4.2 JOB CREATION AND CONSUMER SPENDING
The marijuana industry has created many jobs. Marijuana dispensaries and farms need workers to grow, package, distribute, and sell marijuana. This has provided employment opportunities for thousands of people.
As of February 2024, there were about 15,000 marijuana dispensaries in the United States.
On average, each dispensary has 6.2 employees, meaning that dispensaries alone provide around 93,000 jobs.
California has the most dispensaries (over 3,500), while Oklahoma has the highest number of dispensaries per capita.
Besides dispensary jobs, the marijuana industry also helps other businesses grow. These include:
Software companies (developing systems for dispensaries and tracking sales)
Construction companies (building dispensaries and marijuana farms)
Accounting firms (helping businesses manage their money)
Banks and lenders (providing financial support for marijuana businesses)
Marijuana sales also contribute to the economy through consumer spending. In 2022, Americans spent about $30 billion on legal marijuana. This was more than what they spent on chocolate, eggs, or craft beer. Experts predict that by 2026, the marijuana industry will contribute nearly $150 billion to the U.S. economy.
5. INVESTMENT OPPORTUNITIES
Legal marijuana provides new investment opportunities. If marijuana becomes fully legal across the U.S., more companies could list their stocks on major stock exchanges, making it easier for investors to buy shares. Currently, many successful marijuana businesses are based in Canada, where marijuana is already legal at the national level.
As of 2024, the largest marijuana investment fund was Advisor Shares Pure US Cannabis ETF (MSOS), which had over $1 billion in assets.
6. SAVING MONEY ON LAW ENFORCEMENT
Another major economic benefit of legalizing marijuana is the money saved on law enforcement. Every year, the U.S. government spends about $3.6 billion to enforce marijuana laws. This includes costs for:
Arresting people for marijuana-related offenses
Holding trials for marijuana-related crimes
Incarcerating people who are caught with marijuana
Appeals and other legal procedures
When marijuana is legalized, fewer people are arrested and put in jail for marijuana-related offenses. This reduces the cost of law enforcement and allows police to focus on more serious crimes.
However, even if marijuana is legal, the government still needs to regulate its use. For example, people who drive under the influence of marijuana can still face legal consequences. Similarly, selling marijuana to minors remains illegal.
7. HOW MANY STATES HAVE LEGALIZED MARIJUANA
As of 2024:
37 states and Washington, D.C. allow medical marijuana.
24 states allow both medical and recreational marijuana.
Some states only allow the use of CBD oil with THC for medical purposes.
8. HOW MUCH MONEY ARE STATES MAKING FROM MARIJUANA TAXES?
In 2023, states that allowed marijuana sales collected a total of $4.2 billion in tax revenue. This does not include local taxes collected by cities and smaller communities. This money helps fund state programs, education, healthcare, and infrastructure.
9. ECONOMIC IMPACT
Legalizing marijuana brings many economic benefits, including:
Increased tax revenue for states
More jobs in the marijuana industry and related businesses
Higher consumer spending boosts the local economy
New investment opportunities for individuals and companies
Lower costs for law enforcement, freeing up resources for more serious crimes
10. CHALLENGES OF LEGALIZING MARIJUANA
Despite the economic benefits, there are still challenges to legalizing marijuana. Some people worry that legalization could:
Lead to confusion among law enforcement officers due to constantly changing laws.
Increase the number of young people using marijuana.
Lower property values in areas with many dispensaries.
Lead to higher homelessness rates in some communities.
Because of these concerns, some states still do not support marijuana legalization. There is also resistance at the federal level, making it unlikely that marijuana will become fully legal across the country shortly.
11. CONCLUSION
The debate over marijuana legalization continues, but the economic benefits are clear. Legalizing marijuana increases tax revenue, creates jobs, attracts investors, and saves money on law enforcement. While there are still concerns about its effects on society, the growing number of states that support legalization suggests that marijuana will continue to play an important role in the U.S. economy.
As more states see the positive impact of legalizing marijuana, there may be a stronger push for nationwide legalization. Until then, individual states will
continue making their own decisions on how to regulate marijuana use within their borders.