1996 was a big year for marijuana. This was the year California legalized medical marijuana, making it the first state to recognize cannabis as having medicinal benefits.
More than 20 years later, the rest of the U.S. is making huge strides to legalize both medicinal and recreational marijuana use.
Today, 33 states plus the District of Columbia allow medicinal marijuana use. Out of those 33 states (plus DC), 10 allow recreational marijuana use. While the federal government considers it illegal, DC itself also allows for rec use.
While we can tout the many cannabis health benefits, there’s a marijuana benefit that gets overlooked: the economic benefits.
Here are the marijuana economic benefits that marijuana legalization can provide on a local, state, and federal level.
How Much Money Does Marijuana Make?
Marijuana is a popular product. It enhances a sensation of euphoria amongst its users.
Even users enjoy using the non-psychoactive and CBD-dominant strains for medicinal purposes. This fact proves that users are willing to pay for marijuana products.
How much are states pulling in from marijuana sales? Here’s a state-by-state view of yearly revenue from marijuana sales, for both medicinal and recreational marijuana.
- Alaska (recreational) – $39.5 million
- Arizona (medical) – $406.7 million
- California (recreational) – $1.56 billion
- Colorado (recreational) – $996 million
- Connecticut (medical) – $50 million
- Delaware (medical) – $7.1 million
- District of Columbia (recreational) – $17.7 million
- Florida (medical) – $17.4 million
- Hawaii (medical) – $17.2 million
- Illinois (medical) – $91.1 million
- Maine (recreational) – $83.4 million
- Massachusetts (recreational) – $106 million
- Michigan (medical) – $633 million
- Minnesota (medical) – $9.6 million
- Montana (medical) – $31.8 million
- Nevada (recreational) – $102.7 million
- New Hampshire (medical) – $7.2 million
- New Jersey (medical) – $37 million
- New Mexico (medical) – $54.2 million
- New York (medical) – $40.9 million
- Oregon (recreational) – $777.6 million
- Rhode Island (medical) – $60.2 million
- Washington (recreational) – $1 billion
As you can tell by these numbers, marijuana brings a large number if revenue on a state level. If marijuana was legalized in some manner (whether it be medicinal or recreational) this could boost a huge revenue growth for the country as a whole.
Also note: During the November election, Michigan voted to legalize marijuana for recreational use. Earlier this year, Vermont legalized rec weed through a legislative process. Vermont’s government hasn’t put provision yet in place, which is why there aren’t figures listed.
Tax Revenue Benefits
With that much in revenue, you can guess a decent-sized chunk of it will go toward taxes.
States such as Colorado with both medicinal and recreational marijuana can easily generate over a million in tax revenue. Since Colorado generated over a billion dollars worth of marijuana revenue, this is a huge tax opportunity for these states.
What if marijuana was legalized on a federal level? The tax revenue could amount to as much as $131.8 billion and could happen as soon as 2025.
Incredible Business and Income Raises
By looking at these revenue numbers, you can tell marijuana is a profitable and successful market. Marijuana millionaire stories are all too common.
And there’s a wide amount of business opportunities in the marijuana industry; you can open up a dispensary, a growing plant, provide cannabinoid extraction equipment, and there are even marijuana-specific marketing and design firms.
Before dreaming of marijuana plants and dollar signs, all cannabis business owners need to take serious responsibility when starting a cannabis business.
You need to pay special attention to laws and regulations for your state and county — even beyond knowing if your state allows medical or recreational marijuana. For example, certain counties and districts don’t allow marijuana businesses.
With marijuana legalization increasing, these policies are predicted to become more relaxed and starting a marijuana business will become easier.
Increased Job Growth
By 2024, it’s estimated that 41,000 jobs will develop in the marijuana industry. This number could even reach as much as 81,000 in larger states such as California.
Labor income is also predicted to reach at least $1.7 billion or $3.5 billion in larger states.
The marijuana industry is not only profitable but it’s also new. This means it’s a prime time to start working in the marijuana industry. Popular jobs that anyone can get in the cannabis industry include:
- Budtender (or marijuana salesperson)
- Edible maker
- Vaporizer manufacturer
- Marijuana delivery person
- Dispensary manager
- Marijuana production manager
- Marketer or designer in the marijuana industry
- Cannabis harvester and grower
The demand for talented marijuana industry workers is becoming apparent. In states where medical or recreational marijuana is legal, state universities are developing marijuana classes and even degrees.
Cannabis companies, state government, and consumers aren’t the only ones benefitting from marijuana legalization and the revenues it produces. This revenue generates a huge investing opportunity. Investing in marijuana stocks can help improve and secure your portfolio.
Let’s take cannabis marketing, packaging, and branding company Kush. This past July, Kush received $12.9 million in revenue, growing their revenue stream at 173%. In one month, this revenue increase caused their stocks to increase by 0.7%.
While the opportunity is there, many investors struggle. Since marijuana isn’t legalized on a federal level, many investors struggle to profit from cannabis stocks.
This fact also makes many cannabis companies ineligible to provide services on the public stock exchange. Using resources such as the National Institute for Cannabis Investors will help you make the best cannabis investing choices.
The Future of Cannabis in America
While it’s impossible to predict the future, one fact is certain — cannabis use will only increase and more states will legalize marijuana for both medicinal and recreational use. Revenue will increase further and will benefit the nation on both a state and federal level.
Let’s take California, for example. In 2016, California generated $6.6 billion in cannabis sales. The vast majority of sales were medical use, which amounted to $4.7 billion.
In 2025, this number is expected to quadruple. It’s expected that California will reach a whopping $24.1 billion in cannabis sales. Recreational use is expected to increase even though medical use is still expected to lead.
Currently, marijuana is the largest agricultural commodity. It’s reached $8.5 billion, several billion over other food and agriculture goods such as dairy and fruit.
This number is only expected to increase, making cannabis a dominating influence on agriculture products.
The Marijuana Economic Benefits Will Only Increase
The marijuana industry is quickly becoming a dominating presence and the marijuana economic benefits will only continue to grow.
If you want to know more about the cannabis industry or other business and finance topics, continue to educate yourself here.