Introduction

Legalising marijuana has been a contentious issue in the United States for many years. Lawmakers are still undecided on whether the economic values of the drug should surpass the risk of threatening law and order in society. However, by 2016, several states including Washington, Massachusetts, Colorado, and California, had already passed laws to legalise marijuana for leisure purposes. Likewise, states like North Dakota and Florida chose to legalise it for medical uses only. As a result, legalising marijuana is becoming common in most states that had earlier refused the move. Consequently, this has led to the establishment of many firms that grow the drug or use its extracts to make different therapeutic products. Marijuana business has, therefore, proved to be of significant economic value to the state and federal governments.

Literature Review

Dills, Goffard, and Miron (2016) focus on the effects of legalizing marijuana in states like Alaska, Oregon, Washington, and Colorado. The study examined different views of people who supported or rejected the law to legalise the drug and discovered that legalising marijuana has an insignificant effect on its use and associated consequences.

Geluardi (2016), a renowned author, wrote about the increase in the number of industries associated with medical marijuana. The author concentrates on the states that have passed laws to license the production and sale of the drug. The book looks at the economic impacts of the drug in states like Colorado and California and concludes that the revenues generated in the marijuana business have led to a significant rise in that industry.

Hajizadeh (2016) researches the possible social, economic, and health effects of authorising marijuana use. The article concludes that the drug has many economic effects like increasing tax revenues, creating jobs and saving public money. Therefore, legalizing marijuana will reduce the number of drug-related charges, a move which saves money by lowering court hearings and incarcerations. On the other hand, legalizing the drug caused accidents made by people driving under the influence.

McGinty et al. (2017) conducted an online assessment to find out what people thought about recreational marijuana. The study concluded that most participants believed that the drug had more economic benefits than health risks. Additionally, a significant number of participants wanted to legalize the drug because it increased tax returns.

Economic Analysis

Job Creation

Legalizing marijuana will increase job opportunities in the concerned states and the whole country. Firstly, the states that have legalized the drug will have to grow it in large amounts to meet the high demand for the product. The move will create thousands of jobs since people will be required to work in these farms to take care of the plants. Additionally, companies that use the extracts to make various therapeutic products will also need a workforce. Moreover, a state like California has an already quantifiable economic impact because its marijuana industry has matured (McGinty et al., 2017). Studies conducted in California show that marijuana-related sales have created more than 85,000 jobs since the drug became legal. Similarly, the study predicted an increase of more than three billion dollars in the total labor earnings of that state in the next three years. Likewise, further studies suggest that legalizing marijuana could create more than one million jobs countrywide (Hajizadeh, 2016). The employment boom will spread from the gardens to sectors like finance and construction because businesses will need loans and buildings to start operating effectively. The marijuana business should be legal in all states because it will create employment opportunities for many people in the country.

Increased Tax Returns

The income earnings have risen considerably in states that have legalized the production of marijuana. For instance, Colorado received more than 130 million dollars from the tax collected in marijuana-related business transactions (Geluardi, 2016). Likewise, the total sales in North America rose to more than six billion dollars, which represented a twenty-eight percent increase in 2016. Moreover, purchases are likely to increase to more than twenty-one billion dollars in the next five years (McGinty et al., 2017). Research conducted in Colorado revealed that tax levied on legal cannabis has brought more than fifty million dollars to the state’s economy (Dills, Goffard, & Miron 2016). Such promising returns have been the main reason why other counties have agreed to legalize the drug as well. The states that have not accepted the business should consider the significant tax revenues before rejecting any proposal to legalize marijuana.

Improved Investment Openings

The legalized marijuana enterprise creates an opening for several investment opportunities in the United States. Primarily, legalizing marijuana on a national level will allow the firms dealing with the drug to trade freely on the stock markets (Hajizadeh, 2016). The move will help to attract many investors as well as promote the liquidity of the concerned companies. Additionally, the business will attract major shareholders currently involved in other countries like Canada that have legalized the trade. More investments on the drug will lead to more returns for the country, which will boost the economy considerably. The investors will keep coming if more states agree to legalize marijuana for pleasure and medical reasons.

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Graph

Figure 1 a graph showing the projected incomes from jobs and taxes in California and North America related to legalized marijuana.

The graph above shows the projected incomes earned over five years. The blue figure represents the expected income from job opportunities related to legalized marijuana.  The chart predicts that the earnings from the jobs in California will be more than five billion dollars in 2020. On the other hand, the red figure represents the projected earnings from tax revenues in North America. The tax collected from the marijuana industry is expected to grow from 6 billion to about twenty billion dollars in 2020. The graph shows that the legalized marijuana industry has a positive impact on the economy because the income generated from it keeps growing.

Conclusion

Legal marijuana has brought significant contributions to the United States’ economy in both state and federal governments. The drug has created more jobs in the concerned states like California and studies project that the number will continue increasing with time. Similarly, legal marijuana has improved tax returns in the relevant states like Colorado—which got more than fifty million dollars. The marijuana business can also come with many investment opportunities like trading in the stock market. States that have not legalized marijuana should look at the economic gains that come with passing the law. Likewise, the federal government should revise its stand on marijuana because the country stands to gain if marijuana is legal.

References

Dills, A. K., Goffard, S., & Miron, J. (2016). Dose of reality: The effect of state marijuana legalizations.

Geluardi, J. (2016). Cannabiz: The explosive rise of the medical marijuana industry. Routledge.

Hajizadeh, M. (2016). Legalizing and regulating marijuana in Canada: review of potential economic, social, and health impacts. International journal of health policy and management, 5(8), 453.

McGinty, E. E., Niederdeppe, J., Heley, K., & Barry, C. L. (2017). Public perceptions of arguments supporting and opposing recreational marijuana legalization. Preventive medicine, 99, 80-86.

 
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