Voters in nine states will decide whether to legalize recreational or medicinal marijuana this coming election. The results could make a significant impact on the future of the economy, job opportunities and the social attitudes regarding cannabis.
November 8th is expected to be a major milestone for the United State’s legal cannabis market. U.S. voters in nine states are poised to expand the legal use of cannabis to more than half of the U.S. Five states – Arizona, California, Maine, Massachusetts and Nevada – will decide on whether to legalize recreational marijuana. Four states – Florida, Arkansas, Montana and North Dakota – will consider medical marijuana measures. The results of this year’s election could increase the number of states with marijuana-related legislation to 29, and prove to cause a substantial shift in the nation’s cannabis laws and market.
Impact on the Cannabis Market: A Boost in the Economy and Tax Revenue
The passing of the marijuana ballot initiatives will increase the nation’s legal cannabis market by billions. Bloomberg reports that if all nine marijuana-related ballot measures pass on November 8, the market for legal cannabis products could double its current $7 billion value by 2020. However, other economic forecasts have projected that the legal marijuana industry will add $24 billion to $44 billion annually to the country’s economy by 2020. California’s market alone has been projected to be worth $6.46 billion by the year 2020 if voters approve its recreational measure, and the state is expected to pull in $1.6 billion in recreational sales in the first year of adult use legalization.
Cannabis contributes to the economy of Colorado, the first state to legalize recreational marijuana in 2012, more than all other industries, including oil and gas, coal and other mining, business services, general manufacturing and retail trade, according to a recent report from Marijuana Policy Group. With legalization, property values and rent levels have grown at rates far above the national average. One report claimed that cannabis legalization “kick-started the recovery of the industrial market in Denver.”
Legalizing marijuana will subsequently significantly increase state and local tax revenue. All four states with recreational marijuana laws impose licensing fees and excise and sales taxes that have brought in millions in revenue. Where this effect is most notable is in Colorado, which according to the state’s Department of Revenue, brings in over $10 million per month from adult use marijuana sales alone. The state generated $135 million in revenue from recreational sales in 2015, with $35 million of that money earmarked for school construction. In the first year of recreational sales in Washington, the state generated about $70 million in tax revenue, double what was originally forecasted.
Additionally, states will save money by not enforcing prohibition. According to the Denver Post, in the two years before Colorado voters legalized adult use cannabis, prosecutors filed more than 11,000 charges for marijuana law violations. In 2014, two years after legalization, the number of charges shrank to about 3,500. The state saved anywhere from $12 million to $40 million dollars during the first year of legalization by ending prohibition, according to estimates by the Colorado Center on Law and Policy.
Effect on Employment: The Creation of Thousands of Jobs
The rapid growth of the legal cannabis industry will mean a significant bump in job opportunities. Last month the 2016 Marijuana Business Factbook calculated that the United States’ marijuana industry has generated an estimated 100,000 to 150,000 jobs. However, a more recent report from Marijuana Policy Group found that Colorado’s legal cannabis industry alone was responsible for creating more than 18,000 jobs in a year’s time. Additionally, the state’s unemployment rate fell dramatically at the start of 2014, which coincides with the opening of marijuana retail stores.
The already-growing employment numbers “shows that this industry is becoming an economic engine for the country,” Chris Walsh, editorial director of Marijuana Business Daily, told CBS News regarding the Marijuana Business Factbook data. “We’re really just scratching the surface in terms of job in this industry.”
The booming sector requires employees that are directly involved in plant-touching responsibilities, including marijuana growers, budtenders and trimmers, retailers, testing lab technicians and manufacturers. However, the market will also bring work to a plethora of ancillary positions, such as sales reps, security personnel, consultants, vaporizer manufacturers, lawyers, accountants, marketers, and web developers and designers. In California, 115 new companies have joined the National Cannabis Industry Association since January in preparation for legalization.
Impact of Cannabis Access: More People Using Marijuana and Living in States with Marijuana Laws
The loosening of cannabis laws will significantly increase the number of people with legal access to cannabis. If all five of the recreational marijuana ballot measures pass, the percentage of Americans living in states where cannabis use is legal for adults will rise from 5 percent to as much as 25 percent (76 million people). Legalizing recreational marijuana in Massachusetts, California and Arizona would mean that the substance would likely be available to purchase in Boston, San Francisco, Los Angeles and Phoenix, major cities with a combined population of nearly 6.9 million.
The result of greater access could lead to increases in cannabis use by adults. In Colorado specifically, marijuana use among adults aged 26 and older increased from 5 percent in 2006 to 12 percent in 2014, the year of legalization. According to the Cato Institute report, following the legalization of recreational marijuana in Colorado, Washington, Oregon and Alaska, marijuana use by adults was found to increase slightly. However, it’s important to note that use by youth in the four states with adult use laws took a downturn following legalization.
Cannabis use by adults has shown to be already increasing as laws have been loosening. A recent Gallup poll found that more than 33 million (1 in 8) adults in the U.S. currently use marijuana, while a study published in JAMA Psychiatry found that cannabis use in the U.S. doubled in the 10 years between 2001-02 and 2012-13.
Influence on Social Attitudes: A Boost in Support and Legalization Movements in Other States
The Cato Institute recently examined the effect of state marijuana legalizations and observed that with legalization and “as marijuana becomes more commonplace and less stigmatized, residents and legislators become less opposed to legalization.” Additionally, fewer people were found to consider regular marijuana use a high-risk behavior.
“Whether these [marijuana] initiatives pass or fail, they are undeniably fostering a public dialogue for ending prohibition,” said Mason Tvert, spokesman for the Marijuana Policy Project. “The debate in each state will start to shift more toward, ‘How will marijuana be legal?’ and, ‘What will that look like?’ instead of whether it should be legal.”
If Arizona approves its adult use ballot measure, it will become the first traditionally red state to legalize marijuana for personal use. Voters in Maine could introduce recreational marijuana to New England.
California, the state that kicked off the nation’s medicinal cannabis market in 1996, could provide a hefty boost to nationwide legalization efforts. If the marijuana legalization measure passes, a strong possibility considering the results of recent polls, the entire West Coast would have adult use laws in place. Bloomberg suggests that a measure passing in California would give momentum to the efforts to lift prohibition laws nationwide.
“If [the recreational marijuana measure] passes in California, and particularly if it passes in the other four states, it’s lights out for marijuana prohibition,” Troy Dayton, chief executive officer of The Arcview Group, told Bloomberg. The Arcview Group is an industry investment and research company that provides financing for cannabis related business and projects.
“I think there’s gonna be a stronger voice for reforms at the federal level…” said Beau Kilmer, co-director of the RAND Drug Policy Research Center. “If California legalizes, you’re going to have a lot of its federal representatives and senators… pushing for some of these reforms.”
Social acceptance for marijuana is currently already at an all-time high. Polls have shown that the dramatic shift in attitudes toward legalizing marijuana have coincided with the expansion of the legal cannabis market throughout the U.S. A majority of Americans now believe that consuming cannabis isn’t a harmful behavior and consider prohibition to be ineffective, and support for legalization is expected to grow following the results of the coming election.
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