Impact of marijuana legalization in the United States
Regions that have legalized marijuana in the United States have seen a wide mix of results including:
- Decrease in opioid-related incidents
- Increase in employment
- Increase in tax revenue
- Cost savings from law enforcement cost
- Real estate industry booms
- Increase in recreational marijuana consumption
- Increase in investment opportunities
- Increase in social good
1. Reduced Opioid-related incidents
- According to a report by the US Healthcare, opioid epidemic has been the biggest problem faced by the country. And, in 2016 alone, over 64,000 people in the United States died from opioid overdose. But, a 2014 study revealed that the states with medical marijuana programs created a 25% reduction in opioid-related death rate, compared to states without cannabis access.
- Cannabiz Media verified the information by reporting that the decline in opioid-related overdoses is linked to legalization of marijuana.
- Additionally, the report also shows that there has 23% decrease in opioid dependence and 15% decrease in opioid treatment admissions in states who have legalized marijuana.
- According to Drug Policy Alliance, the availability of medical marijuana and legalization of recreational marijuana has a positive effect on public health.
2. Increase in Employment
- Due to marijuana legalization, marijuana industry in Colorado has hiked up over the past four years. This has increased employment within the industry and it's supporting sectors.
- Since all the employees in marijuana industry are required to hold occupational licenses, Colorado Department of Revenue — Marijuana Enforcement Division has reported that as of March 2018, over 38,000 individual licenses plus 1,637 licenses for business owners has been issued.
- From this, around 17,821 full-time staffs are currently employed, which represents a 17.7% increase in employment rate when compared to previous year.
3. Increase in Tax Revenue
- Investopedia reported that an increase in tax revenue were seen in Colorado and Washington due to taxes and fees imposed on medical and recreational marijuana.
- According to a few researchers in Colorado, the legalization of marijuana shows a positive impact on economy. The research shows that about $58 million from taxed and regulated cannabis industry contributed to the development of local economy in Pueblo County in Colorado. Between 2017 and 2025, a $105.6 billion contribution to economy on federal level is expected from business tax revenues, 15% sales tax, and payroll withholding.
- California being a state with bigger population can expect an estimated $3 billion in tax revenue, according to ICF International. On the other hand, Massachusetts’ special senate committee estimated a $50-$60 million tax revenue from marijuana sales.
4. Save Money from law enforcement cost (for some types of marijuana-related crime)
- A 2013 study by American Civil Liberties Union shows that the cost of federal marijuana enforcement was approximately $3.6 billion per year.
- But according to numerous studies, a significant number of marijuana-related crime such as marijuana possession, cultivation, and distribution dramatically reduced after marijuana legalization.
- The reduced number of arrests resulted in significant savings which was estimated to be hundreds of millions of dollars.
- In Colorado, total marijuana arrests decreased during a five-year period from 12,709 in 2012 to 6,153 in 2017. On the other hand, marijuana possession arrests decreased from 11,361 to 5,154 during the same period, in Colorado.
5. Real Estate Industry Booms
- Due to marijuana legalization, demand for cannabis has increased. As a result, there is an increased requirement of commercial and industrial spaces to be used as stores, warehouses, and indoor marijuana cultivation facilities and greenhouses. And, this has caused the prices to skyrocket over the last couple of years.
- In Sacramento, warehouses and industrial buildings sells for twice the usual asking prices. While in Salinas a marijuana company paid around $3.4 million for 47 acres of land with several greenhouses.
- In Colorado, the marijuana industry occupies 14.2 million square feet of industrial warehouse. Spaces occupied by marijuana business are priced at $115 square foot, a 25% hike over traditional class-B and class-C industrial spaces.
6. Increase in Recreational Marijuana consumption
- Oregon Research Institute (ORI) conducted a study to analyze how marijuana legalization impacted recreational marijuana.
- While there are no drastic changes on the number of youths who use marijuana, the study shows that the frequency of use by youth who are already consuming marijuana has increased by 26%.
- According to Denver Post, the number of adults aged between 18 and 25 who use marijuana increased between 2014 and 2017. The report also states that men are frequent users than women.
- Based on the study by BDS Analytics, there is a significant increase in marijuana consumption in California where 29% of them are adults. The study suggests that more people in the state are currently using marijuana than the previous year and that the tolerance and acceptance of marijuana in California is becoming more common.
7. increase in Investment Opportunities
- The legal marijuana market in the United States creates a potential market for investors.
- In 2017, an investment firm Arcview invested $500 million on private cannabis companies such as growers, dispensaries and companies that produce ancillary products.
- Other investment opportunities in Cannabis industry relies on pharmaceutical companies. GW Pharmaceuticals is one of the most known company that develops cannabis-based drugs for multiple sclerosis. Zynerba Pharmaceuticals, on the other hand, develops cannabinoids for neuro psychiatric conditions and Therapix Biosciences for central nervous system disorders.
- However, the less-risk investment is on real estate. After marijuana legalization, the need for facilities and stores are in demand and real estate investors have already jumped into this market which demonstrates a profitable business.
8. Increase in social good
- Marijuana legalization has prompted the states of the United States to allocate marijuana revenues for social good.
- In Colorado, Colorado Department of Education received a total $230 million between 2015 and 2017 to fund school construction, and other initiatives such early literacy and bullying prevention and behavioral health. (s11)
- In Pueblo County in Colorado, an amount of $420,000 from marijuana tax revenue was used as funds for the scholarships of 210 students.
- In Washington, 55% of tax revenue from marijuana industry was dedicated as funds to basic health plans and 25% to be used in disorder treatment, education, and prevention.
- Oregon and Nevada allocated a portion of marijuana tax revenue as fund to state schools.
- California and Massachusetts invested the tax revenues to help low-income communities that was adversely affected by drug arrests and incarcerations and to recover from the harms created by unequal drug law enforcement.