How Can Legalizing Marijuana Rescue The Economy?
You’ve probably heard about the medical benefits of marijuana. You may even know about the endless uses for hemp, or the safety of cannabis compared to alcohol. But what about the positive impact marijuana could have on the economy? Since states first began legalizing recreational cannabis in 2013, it has become easier to track just how much money Americans are willing to spend on pot- and the results are shocking.
For Colorado, cannabis is likely to become a billion-dollar industry over the next few years. In 2014, marijuana sales reached $700 million and are only expected to increase in the future. The state brought in a total of $76 million dollars from pot during 2014, including taxes, industry fees, and the additional 15% excise tax. Economists predict tax revenues from marijuana to reach $81 million in the 2014/15 fiscal year, rising to $94 million by 2016. Cannabis brought in so much money that Colorado celebrated a tax holiday on September 15th, allowing customers to purchase pot tax-free for an entire day.
Washington state is witnessing a similar phenomenon. They’ve brought in close to $70 million from excise, state and local taxes during the first year of legal cannabis. Unlike other states, Washington doesn’t allow marijuana users to grow their own pot, so legally, the drug has to be purchased from a licensed retailer. In the first year, Washington residents bought over 23,000 pounds of marijuana and grew over 31,000 pounds. That’s 15.5 tons of cannabis in one state. Imagine what we could do with all 50.
Oregon is taking its time implementing new pot laws, but so far, the state expects to raise $18.4 million over the next two years. Keep in mind, these are only states that have legalized recreational cannabis. Other states with medical marijuana laws and dispensaries are also experiencing increased tax revenue. US taxpayers could save millions if the drug were federally legal.
The possibilities of marijuana are endless. In addition to more tax dollars, economists predict the US government could save up to $14 billion annually by legalizing cannabis, while prisons around the country spend an average if $1 billion on marijuana-related incarceration. Prohibition of marijuana costs American taxpayers anywhere from $10-14 billion per year- money that could be spent on health and education. In 2009, economist Stephen Easton estimated that legal pot could be a $45-100 billion industry in America.
According to the ACLU, 8.2 million people were arrested for marijuana related crime between 2001 and 2010 and 52% of all drug arrests were pot-related. Of those 8.2 million arrests, only 6% were for sale or distribution. Most people are going to jail for simple possession. Marijuana related arrests in 2011 account for more arrests than all violent crimes combined. State governments spend over $3.5 billion dollars every year enforcing marijuana laws. Anthony Papastrat sums it up nicely here:
“This — $44 billion over more than 30 years — is the grand cost of petty crime.”
The public attitude on marijuana today is similar to the perspective people had near the end of prohibition. If you thought we learned our lesson with alcohol, think again. The black market is flooded with cannabis, all sold at top-dollar and completely untaxed. Our government is spending billions of dollars each year enforcing marijuana laws that are not being obeyed. Conservative states have chosen to increase penalties for possession as a deterrent, but this translates to more money spent on prisons and law enforcement. Those with a criminal record have a harder time finding jobs and housing, which limits the amount of money they can put back into the economy.
Legal marijuana could save our nation billions of dollars, create jobs, increase tax revenue and improve the lives of millions. States like Washington, Colorado, and Oregon are already reaping the financial rewards of cannabis. We could have less prisoners, more jobs, more money and better medicine available for those who need it. What are we waiting for?