The trend towards the widespread legalization of cannabis for recreational use is gathering momentum as we enter into 2021. With the ushering in of a new administration, there is a widespread belief that states will continue to be empowered to legalize the use of cannabis. There are already 15 states where cannabis has been legalized.
It is also anticipated that during 2021 other states will join the group that has legalized cannabis for recreational use. Experts believe that these states will include New York, Pennsylvania, Maryland, Connecticut and New Mexico.
Many of the states on the cusp of legalization are looking enviously at the tax revenue that is being generated by neighboring states – and rightly fearing that there will be an exodus of companies wanting to be involved in the growing marijuana business to their neighbors – and that they will lose out on substantial tax revenue and other fees.
Just how substantial could those losses be? Colorado is perhaps the perfect example of how much revenue a state can raise through legalization. The state has released figures that show that in 2019 it collected in excess of $302 million in taxes and fees from the marijuana industry. Imagine if you will that the federal government legalized the use of cannabis across the United States. It’s not beyond the realms of imagination, although currently unlikely even if incoming President Joe Biden is in favor of this – as he has said he is. Canada did so in 2018 with no ill effects. If that were to occur the revenue generation possibilities are sky-high (excuse the pun). In the U.S. marijuana sales were estimated to value $12.2 billion in 2019. Projections by Arcview Market Research and BDS Analytics show that this could increase to $31.1 billion by 2024.
Cannabis legalization would also create an enormous number of job opportunities – which would(to a certain extent)offset the job losses that have been suffered by workers across America due to the business closures forced by COVID-19. Those job opportunities may take some time to materialize – but according to New Frontiers (a research group focused on the marijuana industry), a move by the federal government to legalize marijuana countrywide might generate 1 million jobs by 2025.
This may seem like a pipe dream at the moment – but those non-believers should take a look at the performance of marijuana-related stocks. They are surging. When in doubt look to the money men, they’ve done the research and are incredibly bullish about the industry. This could mean good news for producers and for others active in the marijuana sector.