The Economic Impacts of Legalizing Marijuana

The Economic Impacts of Legalizing Marijuana

Cannabis legalization has always been a very controversial topic since time immemorial. Yes, cannabis addiction could be detrimental to one’s health, but at the same time, its legalization might have a great positive impact on the economy. The economic benefits that cannabis poses to have is the major motivation for its legalization.

Where is Cannabis Legal?

Legal marijuana is soon becoming the new normal as many countries are beginning to legalize cannabis for medical or recreational purposes. According to US News, 19 states have legalized the recreational use of cannabis. These states agreed to take the bold step of legalizing cannabis sales because of the powerful incentives it offers. However, some other states still hold tight against cannabis legalization because of its disadvantages.

Economic Impact of Weed Legalization

What are the pros and cons of legalizing weed, you might ask? Even though legal marijuana might be gaining ground fast, legalizing weed could still negatively impact the economy. So let’s start with the pros.

Economic Benefits of Legalizing Weed

Increased Tax Revenue

A tax increase is one of the greatest economic benefits of cannabis legalization. In 2021, the sales of legal marijuana products were up to $559.5 million in Washington. A whopping $85 million increase from the previous year.
The New Frontier Data forecasts state that full legalization of cannabis in the United States has the potential to generate cumulatively $105.6 billion in federal tax revenue. Imagine the economic impact this money would have had, good roads, better schools, funding for public projects, and endless possibilities.

Displacing the Black Market

Cannabis legislation is good news for everyone except the bad guys. Some of the drug dealers in the black market have their hands in dirty business-like ties to terrorist groups. Legalizing marijuana will give them two options; open a disparity and submit to being regulated by the government or go out of business.

Increase in Income and Jobs

Setting up nurseries and dispensaries to sell legal marijuana would create jobs and initiate economic activity in the pot industry. In addition, the need to farm, process, distribute, and sell marijuana-based products would create jobs for many.

The New Frontier’s report also predicts that nationwide legalization of marijuana could generate up to 1 million jobs by 2025.

There would be openings for secondary industries related to legal marijuana like software developers, financing services, and construction companies.

Decrease in Crime Rate

The social impact of legitimate weed would be a decrease in the crime rate, and this is because there’ll be less frequent occurrences of gang-related drug violence. In addition, this decrease in the crime rate would let the police focus on other violent crimes and give better funding to the courts from the increased tax revenue.

Spend Less and Save More

We can summarize the economic impact of weed legalization as saving more and spending less. The legalization of weed will give the government fewer financial bills to clear. The United States spends several billions of dollars annually on federal marijuana enforcement. The American Civil Liberties Union report showed that $3.6 billion is spent on enforcing marijuana laws yearly. Therefore, saving $3.6 billion every year will benefit the US economy.

Negative Economic Impact of Weed Legalization

The danger that legal marijuana may pose is the reason why some states haven’t agreed to cannabis legalization. Some of the risks of cannabis legalization include, marijuana addiction, the negative health effects of second-hand smoking, and the possibility of decreased mental and physiological health of citizens.

Control is another major issue of concern related to cannabis legalization, and this is because marijuana has always been a gateway drug. Marijuana users have higher chances of trying harder and more dangerous drugs like heroin.

This lack of control will not be beneficial to the US economy because there will be huge financial pressure on the health system to provide treatment for these people when they eventually have serious health problems.

In a Nutshell

The list of pros and cons of legalizing weed is inexhaustible, but we have discussed all the common arguments on this controversial topic. While it is crystal clear that legalizing weed will positively impact the economy, there will also be a need to manage the negative impacts it might impose. Hence, it is unlikely that the legalization of marijuana will be accepted at the national level anytime soon.

However, over the years, the attitudes of many Americans to cannabis legalization have been elevated. Gallup’s report shows that between 2025 and 2018, the support for cannabis legislation has risen by 30%. It implies that 66% of the United States supports the legalization of marijuana.

As more states are beginning to decriminalize cannabis and as the economic benefits of the legal marijuana industry begin to take effect, the nation will see many compelling reasons to implement nationwide legalization.
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