As the legalization of marijuana slowly sweeps its way across the US, many market and political analysts are looking for evidence to support/refute the other side of the argument. Legal marijuana sales have in a very short time lead to solid increases in US tax revenues in some states.
If the moral connotations of legal weed are in question, speculation abounds as to whether or not cannabis acts as a gateway to more problematic drugs (like oxycodone and other opiates). But when looking at things from the financial and investment sides of the equation, things are much more cut and dried.
Specifically, the US states that legalized recreational marijuana are now benefiting greatly from the tax revenues generated by its dispensary sales. This is significant because the Department of Justice (DoJ) recently warned the governors of states where marijuana has been legalized that they will begin enforcing federal laws and close those dispensaries.
But to get a better sense of what the legalization of marijuana has done for the economy, it is a good idea to look at the actual tax revenue numbers that have been posted (and projected) for each of the states in question. When looking at the comparative figures, it should be remembered that the results can also depend on the value of the US Dollar in forex markets, as this is a key indicator of purchasing power in the value of the currency.
Legal Marijuana Sales and State Budgets
Colorado and Washington were the first US states to legalize recreational marijuana. Over the last year, thanks to legal marijuana sales, Colorado has collected $617 million in tax revenues while Washington collected $831 million over the same period. The comparative timeline here supports the trends in these states, as tax revenues from recreational marijuana in Oregon were strong (but much smaller) at $122 million.
These numbers in the legalized marijuana markets are expected to expand in 2018 and one of the best indicators here is the projection data that is now available for California. It should be remembered that California was actually relatively late to the game in terms of its easing in the restrictions made on cannabis for non-medicinal reasons.
The sheer size of the California population is likely enough, however, to tip the scales in its favor as the state is now expected to generate $1 billion in revenue this year from the newly legal product sales. These are significant numbers that could go far in helping the state’s failing economy and disappointing educational system.
California’s revenues from medical marijuana sales have already been impressive for a long period of time, so the state could become a shining example of the economic benefits that could be captured if cannabis was made legal at the federal level.
The medicinal benefits of marijuana within the world of biotechnology are fairly well-documented. What is less understood is the economic impact that the legalization process would create.
Recent studies have shown that the enactment of medical marijuana laws actually reduces violent crime, and this suggests that society can handle its legalization at the recreational levels.
If these trends continue, maybe the easy funds will become more interesting to the voting members of Congress and more politicians will support the growing trends in favor of legalization.