It should come as no surprise that more States in the U.S. are expected to legalize weed in 2021, joining the 15 that have already legalized marijuana for recreational use and the 36 that allow its use for medicinal purposes. Pundits expect New York, Connecticut, and Virginia to join the growing list of marijuana-friendly states – and that may just be the thin edge of the wedge.
The growing acceptance of marijuana has caused a surge in the value of marijuana-related stocks – and it’s always a sign of things to come when investment firms start to notice a potentially profitable trend.
But why does it make sense for States to legalize, after all the stigma associated with marijuana consumption still exists? The answer, of course, is money.
Those states considering legalization have taken a look at figures released by States like Colorado. Colorado collected an additional $302 million in taxes (and other fees such as licensing) from the marijuana industry in the State during 2019. California also boasts an impressive record when it comes to generating revenue from the marijuana industry. that State saw an extra 411.3 million flow into its coffers in the two years prior to the end of 2019 – and that was just from excise tax. Add to that $98.9 million in cultivation tax and $335.1 million in sales tax and one begins to see just why States are keen to get onto the legalization train.
However, the examples of Colorado and Califonia pale into insignificance as far as potential national income if many pundits are to be believed. It is predicted that marijuana sales alone could total $31.1 billion by 2024. That does not take into account income that might be derived from growers.
It’s not the only tax that makes legalizing weed such an attractive proposition. The U.S. is seeing unemployment figures that are close (percentage-wise) to those last seen during the great depression. The marijuana industry could create an additional 1 million jobs by 2025 if given the go-ahead by the federal government, at least according to New Frontiers, a company specializing in marijuana industry research.
Aside from creating jobs and providing a much-needed shot in the arm to the finances of individual states (and the federal government) wholesale legalization of weed will feedstock portfolios and cut down on the increasingly irrelevant enforcement of marijuana laws. It would also cut down on the influence (and the attendant violence) of the Mexican drug cartels who smuggle marijuana into the United States.
Given these facts, it is inevitable that full-scale legalization cannot be far away. This means added opportunities for growers and those active in retail distribution and other associated industries – and that can only be a good thing.