The legal marijuana industry in the United States is said to be worth an estimated $7.1 billion, which is 25 percent higher than the figure from the year 2015. The significant spike is attributed to a variety of factors, with legalization chief among them.
With the world getting swept up in a heady swirl of talks regarding legalization and decriminalization of the drug, it is essential to look at the implications all these have on the economy. Here are four important things you need to know about weed legalization and the economy (https://www.britannica.com/place/California-state/Economy).
Positive Shifts in Public Views
Legalization efforts as well as widespread publicity on the positive benefits of marijuana have influenced the public’s view of the drug. According to a Gallup survey, the support for the legalization of marijuana has significantly shifted toward a more positive direction with national favorability reaching a record-breaking high of 64 percent in 2017.
In 2005, favorability was only at 36% percent. Twenty-nine states, as well as Washington, DC, and Puerto Rico, have legalized marijuana. Efforts are already in order for a ballot initiative in Michigan for the year 2018. This positive shift is an important factor that continues to drive legislation efforts as well as business opportunities.
More Business Opportunities in the Weed Industry
The legalization of weed has opened many possible business opportunities and growth for existing markets. In fact, a study by New Frontier Data revealed that the United States is expected to see a compounded annual growth rate of 16 percent in the legalized marijuana market.
The same study also estimates that the licensed marijuana market in the country will be worth more than $24 billion by the year 2025. Furthermore, states that have legalized weed for both medical and recreational purposes are also seeing significant spikes in sales.
The state of Colorado saw sales of $1.3 billion in both recreational and medical marijuana in 2016, while in Washington, the sales of recreational weed in 2016 was $696 million, nearly double the figure from the year before.
Growth in Other Industries
Weed legalization does not just benefit immediate producers and sellers of cannabis. Many other industries are expected to see growth as a result of a dramatic increase in demand. A study by the Marijuana Policy Group, an economic and public policy consulting firm based in Denver, in 2016 found that each dollar spent on legal marijuana in Colorado generated $2.40 in economic activity.
Simply put, possibilities abound for all kinds of businesses. For instance, service providers for heating and ventilation systems will be contracted to set up viable conditions for marijuana greenhouses. The food industry can see a growth in marijuana edibles as chefs integrate the plant into their gastronomic fares. Sales of devices like vapes, pipes and bongs from trustworthy online smoke shops along with items like detoxification kits are also expected to rise as more consumers come into the marketplace.
The Green Rush in California
California is the world’s sixth largest economy, with a GDP of $2.6 trillion. That is a similar economic output as an entire country like the United Kingdom. With weed officially legalized in January 1, 2018, California has become the biggest and most influential state in the cannabis industry.
In fact, California is in the midst of what economists and journalists are calling “the Green Rush.” In 2016, the estimated market size of marijuana in California was $8.5 billion. As a power player in the world economy, California will certainly have an important role to play in influencing existing attitudes and business opportunities for marijuana in the United States and beyond.