1 of 4 the Benefits of the Cannabis Industry: The Economic Boost for States
If you were to be asked, ‘what’s the next multibillion-dollar industry within the United States?’ What would your answer be? Most likely, you would guess that it’s some sort of new technology or robotics, but you’d be wrong. According to the LA Times, the cannabis industry is set to become the next multibillion-dollar money maker.
In Colorado of 2015, they saw an estimated $2.4 billion worth of economic activity. A boon not just to the economy, but to the workers themselves, the industry also added 18,000 jobs in Colorado. Local goods and services saw a spike in sales, warehouse space saw an increase in rentals, and equipment used to manufacture cannabis witnessed a solid year for sales.
People are not consuming more cannabis.
While it may be easy to surmise at the increase in economic activity surrounding the cannabis industry in Colorado is a product of more and more people consuming cannabis, that is not the case. According to the Chicago Tribune, what is happening is that people are moving away from the illegal markets of cannabis into the legal market. As a result, economic benefits are easy to track, and Colorado is one of several states that is reaping the rewards of legalizing cannabis.
This is good news for the government because of the tax windfall they stand to inherit, but it’s more than that. Putting a shank in the black market helps remove criminals from their system and thusly removes the economic burdens that criminality places on governments.
Cannabis users move away from medical marijuana.
Receiving permission to use cannabis from a physician takes time and money. With the introduction of legalized cannabis markets, many medical patients are forgoing the need for a physician’s permission and moving directly into the recreational market. For example, in Washington state, the revenues for medical marijuana dropped by roughly 1/3 in the very first year of the recreational cannabis market opening up, but the industry as a whole made further traction.
Tourist revenue from recreational cannabis.
If the alcohol industry is any clue on what we can expect from the budding cannabis industry, States with legalized marijuana use should expect to see a healthy profit from cannabis tourism. For example, tourists visiting California to enjoy their wide selection of wineries spend around 7.5 billion dollars each year on wine tourism.
According to a survey produced by Strategic Marketing and Research Insights, 85% of people who visit Colorado indicated that their primary motivator for their visit was the recreational cannabis market. This key indicator shows us that people are motivated to enjoy the legalized cannabis industry, and they will travel to do so.
When people visit states for their recreational cannabis, they’re spending money on more than just marijuana. They eat out at local restaurants, enjoy tours and services, and buy goods and products from merchandise stores in the towns they visit. This is no surprise; tourists always spend money. The surprise is that there are already cities within the legalized cannabis states that have made it impossible for recreational cannabis stores to open. Some more conservative municipal governments do not like the idea of the tourism that comes with recreational marijuana.
That is unfortunate, because, as discussed, recreational marijuana is the next multibillion-dollar industry within the United States. The economic benefit that cannabis tourism brings to the states and localities that embrace it will continue to enjoy the financial gains.
Rolling up the conclusion.
Much like the tobacco and alcohol industry before it, people love to enjoy their vices where they can, when they can, and with a plethora of activities surrounding it. The industry itself should expect to see an expansion of niches to fill which will only result in more significant financial gains for the governments that tax them.