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Effects Of Recreational Marijuana Legalization On The Economy

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Marijuana legalization has become a popular topic of debate in recent years. In 2014, Colorado and Washington became the first states to legalize recreational marijuana. Now, over a decade later, 24 states have legalized recreational marijuana. There are a wide range of arguments both for and against legalization. In addition to referencing positive social effects, many proponents point to strong economic impacts. 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 …show more content…

Even when tax revenues go to programs unrelated to drug use, it is important for that money to come in steadily. Many states currently impose excise taxes based on the retail or wholesale prices of marijuana. Unfortunately, these types of taxes are flawed because the revenue they generate depends on values that are constantly changing. A sudden drop in average cannabis prices would cause a sudden drop in funding for any programs that rely on those tax dollars. Another common type of marijuana tax is based on the weight or quantity of cannabis in an exchange. While this tax design doesn’t share the volatility issue with price-based taxes, it is also flawed. Quantity-based taxes incentivize producers to increase the potency of their cannabis to lower the tax they pay per THC content. This practice could lead to negative external effects stemming from the increased consumption of more dangerous marijuana products. The third form of marijuana tax is based on potency, and it is the most effective at preventing external costs. Potency-based taxes do not generate unstable revenue like price-based taxes, and they do not give producers any reason to increase the potency of their …show more content…

Not only does legalization increase labor demand, it also increases the labor supply. Abouk et al. (2021) have found that recreational marijuana laws cause a 20% decline in workers' compensation claims. Employees may claim workers’ compensation if they get injured or become ill because of their job. In their study, the authors attribute a reduction in non-traumatic workplace injuries to the availability of marijuana as a pain-management therapy. They compare their results with a previous study related to medical marijuana laws and workers’ compensation, and have observed a more significant decline in workers’ compensation claims after recreational marijuana legalization. The differing effects between medical and recreational marijuana are most likely due to the improved accessibility of recreational laws. More people have access to marijuana for pain management when it is fully legal, because they are able to purchase it over-the-counter without the hassle of acquiring a prescription. The legalization of recreational marijuana is also associated with greater property

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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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Abstract In the last few years, the issue of Marijuana has been a near constant issue. This essay will go through some of the possible effects of legalizing Marijuana. Whether they be health related, economics related, or incarceration related, effects are sure to be seen wherever legalization takes place. When something is legalized, be it a drug, occupation, or anything really, this opens the door for that something to be regulated and therefore taxed.

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Many people believe the legalization of medical cannabis will bring many jobs and economic opportunities. Although several job openings come with the legalization of this substance the hole that is punched in the economy counteracts the effect. As I explained before the legalization of medical cannabis increases state taxes by 30%. Counteracting the possible job openings that medical cannabis could bring. Some people may also say that medical cannabis is the only way to treat many terminal diseases such as cancer and epilepsy.

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This new income can bolster our state economy without raising taxes on main -street. However, legalizing and regulating medical cannabis will take this profit center away from criminals and transfer it to licensed and regulated businesses. We don’t know exactly the size of the marijuana market right now, and we certainly don’t know what would happen to the price and the demand for marijuana under different levels of legalization. But we do know that legalization would lead to a positive revenue impact on the income and sales tax

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Since 2012, the electorate in 3 states and Washington DC have decided that marijuana should also be legalized for use as a recreational drug, to be sold, regulated, and taxed in a manner similar

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If the all states in America decided to make marijuana legal then the nation's economy would boom. The state has already seen a positive effect since making the drug legal as noted in Marijuana's $2.4 billion impact in Colorado is a lesson for 5 states considering legalization, written by Alan Pyke, a Deputy Economic Editor for ThinkProgress.org. In this article Pyke discusses the impact tax revenue money from marijuana has had on Colorado’s economy, also noting that since the legalization, marijuana has generated 2.4 billion dollars for the state of Colorado. Furthermore, the surrounding industries in Colorado have not come close to the amount of production and tax revenue brought in by the marijuana industry, surpassing local industries by almost ninety-nine percent. In addition, other states on the border of legalizing recreational marijuana will look at the impact it has had and may want to follow Colorado's lead and legalize.

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Marijuana prohibition has left the cannabis market unregulated and allows for dealers to inflate the price, charging a risk premium, due to the illegal nature of the good. Furthermore, that the sale of marijuana is illegal is a barrier to entry — economic principles tell us barriers to entry give way to monopolistic markets. Simply put, because of the risk dealers take in selling illicit goods and the fact there is little competition (due to high barriers to entry) they can charge high prices and thus reap sizable profits. By allowing for the legal sale of marijuana, the government can siphon profits from sellers and pocket it as tax revenue — assuming that an effective tax system is implemented. This is an important detail as if prices fall, extra tax revenues would not be realized, defeating a core purpose for legalizing cannabis.

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The legalization of Marijuana can potentially help the American economy when it comes to taxing and regulating the sale of Marijuana, but this economic effect could also cause some problems for the citizens of America. The article, ‘Marijuana Legalization’s Costs Outweigh Its Benefits’ written by David Evans states that,” ... Marijuana businesses can promote their products and package them in attractive ways to increase their market share.” This sounds like it could be good for the economy, which it certainly would be temporarily.

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Marijuana legalization, both recreational and medical, may positively impact the United States economy because of the taxes placed on the plant in several states, and instead of taxing the population, the government receives great revenue. The Marijuana Legalization and Taxes: Lessons for Other States from Colorado and Washington report by Tax Foundation describes the key findings of tax effects, Colorado and its effects tax rate totaling 29 percent, a projection of taxes in Colorado likely to exceed $140 million a year, Washington imposing a 37 percent excise tax, and many more statistics backing up the benefits of certain taxes and legalizations. The legalization of marijuana in present day clearly shows that the economy of the states where this “harmful” drug was legalized went straight up by a high percent in tax revenue. The United States must consider legalizing the drug across the country because not only will it raise the economy, it will also greatly reduce marijuana trafficking incarceration’s which proved to be a huge problem in the country. If the United States legalize marijuana, the crime rates and incarcerations will definitely

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Marijuana Legalization could be a windfall in the form of new taxes applied to its distribution and sale (“Pros and Cons of Legalizing Recreational Marijuana”). Legalizing and regulating marijuana will bring the nation’s largest cash crop under the rule of law. This would create new jobs and economic opportunities in the formed economy instead of illicit market (Marijuana Legalization and Regulation”).

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Weed for Everyone Over the past 25 years, the support for legalizing recreational marijuana has steadily increased to over fifty percent of the population, and it continues to increase (Aleem). The issue of legalizing recreational marijuana has been a controversy for the last few years. Although eight states, including the District of Columbia, have legalized recreational marijuana, it is still federally illegal. This means that the state is going around federal laws allowing marijuana to be used recreationally; a person can still get in trouble for having weed in Colorado because it is federally illegal and federal laws overpower state laws.

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Thesis Statement: Marijuana should be legalized in all states; it has proven medical benefits, economic benefits, and it is a comparatively safe drug. CONCESSION STATEMENT: Granted, people still are going to think drugs are bad or smoking marijuana will hurt your lungs. REBUTTAL (include in-text citation): Even though people will always think that drugs are bad, marijuana has a substantial amount of economic benefits. Just in the past years, when marijuana was legalize in many states for recreational and medical use, it has shown a great amount of profits (Krishna, 2017)

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Some may argue that by legalizing marijuana, it will impact our youths the most since it will become more easily available but just like alcohol, there should be a restriction on the drug. By legalizing cannabis, it will create jobs which would greatly help the economy. If we follow in Colorado’s footstep and apply a 25% tax on the drug, it will also boost our economy. Slowly but surely, marijuana is becoming more socially acceptable than it once was. If history has taught us anything, it is that prohibition does not work.

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Cannabis is a simple, organic plant that can benefit each and every one of us. One of those benefits is an economic one, don't believe me, ask Colorado, one of the leading states in legal marijuana use “pot is a stronger economic driver than 90% of the industries active in Colorado. Legal weed created 18,005 full-time jobs and added about $2.4 billion to the states economy last year.” (Pyke).

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