More and more states are legalizing marijuana, whether for medical or recreational use. While it may seem like these measures are simply voted on and then integrated, legalization brings about some pretty sweeping changes. This is certainly true at the state government level, where laws are added or amended. But legalization also brings about significant change economically, both through the generation of taxes and through the creation of new business and investment opportunities.
New Laws Governing the Possession and Sale of Marijuana
Legalization isn’t binary – marijuana use in the 29 states that now permit it also comes with an array of new laws that people have to follow. For instance, people who own a medical marijuana card are federally prohibited from purchasing a firearm. Other common state rules that apply to cannabis use include not smoking and driving and not smoking in public.
Also, the legalization of marijuana doesn’t mean businesses can pop up immediately. For example, cannabis was approved for recreational use in Massachusetts in 2016. However, the substance was initially just made legal to hold in quantities smaller than an ounce – and the person who sold it was breaking the law. Marijuana couldn’t be purchased or sold from licensed companies in that state until January 2018.
The Decriminalization of Marijuana
Decriminalization is arguably the biggest change of these new laws. However, some states have simply lowered the penalties for the possession or sale of marijuana rather than legalizing it completely. This is true in New York, for example, where it’s illegal to use recreational marijuana but the penalty for a first offense for possession is only a $100 fine.
New Marijuana Businesses
Individuals in certain states can now buy marijuana, which has introduced the demand for a new legitimate cannabis industry. The marijuana trade already pumps billions into local economies – in Colorado, for example, the state generated over $67.5 million in taxes, licenses, and fees within a year of legalizing the substance.
This is excellent news for local and state governments, but it also presents many exciting opportunities for investors. The growth of this industry means new ventures in the field, and some companies have even gone public, just like any other legitimate enterprise. This has sparked an interest in finding the best marijuana stocks, with businesses like Scotts Miracle-Gro and GW Pharmaceuticals leading the way in terms of success for their investors and as trailblazers in this budding industry.
Though it’s not a perfect example, perhaps one of the most similar changes to have ever happened across several states was the ending of prohibition. The re-legalization of alcohol in 1933 introduced ample opportunities for business and economic growth, including the potential for companies to operate across state lines. However, this isn’t an option for marijuana yet since it is still illegal at the federal level.
Only nine states have approved recreational marijuana use as of March 2018, and only 20 states allow it for medical purposes. Without any kind of universal law legalizing the substance in the U.S., for now, the industry is confined to expansion within individual states.