The economy benefits when there is money flowing within the system. With the latest marijuana news from California, the lawful recreational marijuana trade is poised to bring in millions of dollars in tax revenue. California stands as the sixth largest economy in the world. In 2015 California had an output of $2.
46 trillion. This is why it is such a big deal that the golden state has just legalized the recreational use and sale of cannabis. This new trade of legal marijuana will have regulations styled similar to the alcohol industry.
With California already being a heavyweight influencer in the economy, this could bring in a huge influx for the economy for the US. The tax revenue for the legal marijuana trade only started rolling in the beginning of 2018 with patrons legally allowed to purchase marijuana for recreational use on 12:01 am on January 1st, 2018. It is estimated that approximately $1.5 billion could flow into the marijuana market with the onset of these legal marijuana sales. According to these estimates, this number could nearly double by 2019 and by 2020 it will be at $4 billion. This will be on top of the already existing marijuana market and economic benefits.
The total, including the existing medical marijuana market, would be around $6.45 billion in just 2 years. Besides the economic contribution to the United States, the golden state itself will see equal benefits. The Prop.64.
proposes two taxes for the legal marijuana trade and to maximise on the potential economic benefits; Cultivation Tax and Retail Tax. The cultivation tax is $9.25 per oz for buds and $2.75 per oz for leaves.The retail price will have 15% tax with 2020 bringing in the first adjustments. The local governing bodies may also see fit to add extra taxes or they could even offer tax-free initiatives for the infantile industry to being blossoming. Local communities would benefit as well with the onset of new businesses opening.
The benefits on the economy could also include saving the state and regional governments’ a significant amount by cutting the cost of marijuana related arrests and persecutions. Tourism could also feel the economic benefits of legal recreational marijuana. If one glances at the appeal that Amsterdam holds, then it is easy to see the potential that legal recreational marijuana can have. The legal market will assist the state in becoming a marijuana Mecca for toking tourists. Add this to the already present surf culture and hip appeal, and you have yourself a state that could become one of America’s most popular tourist destinations. Businesses will have to obtain specific licenses to participate in legal marijuana trade and the legalization of recreational marijuana in the state of California will create a regulated market, forcing the legal marijuana trade to benefit the local and state economy.
It was estimated in November 2017 that the black market sales were 75% of the marijuana trade. The illegal market generated approximately 5.7 billion as opposed to the sister market, medical marijuana, which brought in $2 billion per year. In addition to the economic benefits, the legal marijuana trade will also open the gates for new prospect of employment.
It is estimated that at least a thousand job openings will be formed in the wake of the legal agriculture and marijuana sales.