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Economic Impact Of Legalizing Marijuana

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My topic is on the economic impact of legalizing marijuana. This is a very talked about topic in the nation and at some point, will eventually become legal on a federal level. There are so many debates and arguments out there about why it will or will not become legal, but nobody ever really discusses the true reasons it has not become legal. We can’t argue that it’s a drug and that’s what is stopping it, or else there would be no legal sales of alcohol or tobacco. Money alone is what is prolonging the inevitable. How much can be made from the sales and what do the profits go to if any?
I am writing about this because when marijuana does become legal, it will be a major event for the United States. This will be a talked …show more content…

Many liked the idea of legalization and many were against it for so many different reasons. Throughout the last decade, we have seen individual states legalize pot for medical or recreational sale. What has this done for those states on a financial level?
Colorado was the first state to legalize marijuana for recreational use and their states finances have improved vastly since. In 2014 to 2015, the marijuana tax and fees revenue in Colorado brought in a total of $211,252,961. This amount was generated in the course of 2 years, and every one of those dollars goes directly back into the bottom line of Colorado’s budget. In a study done by Jon Gettman (2007) “Lost Taxes and Other Costs of Marijuana Laws”, he estimates that the tax rates put on pot could bring in over $6.2 billion annually for the …show more content…

The industry needs to prove the income can help create a stream of continuous revenue that can help lower tax rates and help reduce the deficit. The Congressional Joint Committee of Taxation (JCT), are the ones responsible for estimating if the generated revenue of the marijuana industry will be enough to make it worthwhile for the government. Congress will ask the JCT how much revenue would generate from a change of law and the JCT will give Congress a number. This does not include any other information as to how the number was generated. The JCT does not use models or charts to reach an estimate; instead use professional data collected pertaining to individual states

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They provided information on why eight states have passed the ballot for medical use of marijuana. They mention other countries like Australia has decriminalized marijuana and others have reconsidered the approach towards marijuana. They point out the three general policies approaching the situation with marijuana in the United States, which is the prohibition, decriminalization, and legalization. They define each of these major policies to give you a better understanding. Another major topic they

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In the state of Colorado in the U.S marijuana is completely legal for both casual and medical use. Many had speculations over if the experiment of legalizing the drug in a state would be a success, the doubters were proved wrong as it has been a huge success especially from the economic point of view. In 2014, retail cannabis sales raised some $76 million in tax revenue and fees, according to data compiled by the Colorado Department of Revenue (ARMENTANO, 2015). Marijuana sales in the past year totaled some $700 million (ARMENTANO, 2015). If marijuana was not legalized this revenue would have gone to the black market where most of the marijuana was being sold, but instead can be used to stimulate the economy and raise tax dollars.

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But the financial benefits of legalization go beyond taxing the sale of marijuana and keeping drug money out of the hands of criminals. All across the nation, wherever the drug is illegal, state and local governments spend enormous sums of money on the enforcement of marijuana laws, the prosecution of offenders, and incarceration of the convicted. The Wall Street Journal estimates that the American taxpayer spends $40 billion per year on the administrative costs associated with the criminalization of marijuana (Becker). On the state level, we can again look to the example of Colorado. Conservative estimates by the Colorado Center on Law and Policy show that legalization will save the state $40 million per year by no longer administering marijuana laws (Drug Policy Alliance).

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Examining how legalization impacts the economy is fundamental to understanding the overall effects of recreational marijuana legalization. States that legalize recreational cannabis experience significant increases in tax revenue, positive changes in the labor market, and higher housing values. The additional tax revenue that states

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Colorado a state in United States of America was the first state to legalize recreational marijuana which was in legalized in January 2014. Since they have legalized cannabis employment rates are only increasing as well as the revenue made. No statistics show that crime rates have increased in fact they are decreasing considering Colorado’s government has seen a 98% decrease in cannabis related arrests. “Strauss found that the economic impact of the two dispensaries amounted to 280 jobs and $30 million in total economic output between January 1, 2014 and June 30, 2014, and that the two dispensaries contribute 10 times the tax revenue of either a typical restaurant or retail store.” (Drug Policy Alliance, 2015).

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