The booming recreational marijuana market has tons of economic benefits to the global economy. Various researchers around the world have arrived at this conclusion after analyzing a wide array of economic factors. Legalizing medical and recreational marijuana, employment rates, tax revenue, and investment opportunities have increased. Let’s now take a closer look at some of the main economic benefits of the recreational marijuana market to the global economy.
1. Employment Opportunities and Income
The recreational marijuana market has led to the emergence of cultivation and manufacturing facilities, retail outlets, and dispensaries, which have created many employment opportunities. On top of the jobs that directly arise from the marijuana supply chain, there are hundreds if not thousands of supplementary jobs required to keep the sector moving. These supplementary jobs include accountants, medical professionals, marketers, data analysts, lawyers, and more. In 2017 alone, the marijuana sector hired between 165 000 and 230,000 people in the U.S. Arcview Market Research expects that figure to grow to more than 400,000 in 2021.
The ICF study approximates roughly 81,000 additional direct, supplementary, and induced employment opportunities in California due to recreational pot sales. It also predicts a jump in total labor income by approximately $3.5 billion. A report by New Frontier estimating the impact of recreational pot predicts that national legalization could create at least 1 million jobs by 2025.
2. Investment Opportunities
The recreational marijuana market helps investors across the globe expand their investment portfolios by creating tons of lucrative investment opportunities. Investors in Canada and other countries where recreational cannabis is legal are taking advantage of the sector’s fast-paced growth. Some of them have even listed their marijuana-related businesses on public stock exchanges. If the cannabis market maintains its rapid growth rate in the coming years, more people will likely invest in it.
Starting a recreational marijuana business is a complex, risky, and capital-intensive endeavor. Working with a professional that can help you navigate common mistakes that most people make is crucial for success in this flourishing market. Cannabis consulting companies leverage their in-depth industry knowledge and experience to help you turn your cannabis business into a success story. They positively impact the global economy by helping as many people as possible build successful cannabis businesses, which translates to more jobs and tax revenues. Cannabis consulting companies, especially those that manage private funds, offer cannabis financing to eligible marijuana businesses. Other financing sources for cannabis businesses include angel investors, venture capital funds, high-interest loan providers (private individuals or entities, generally), and private equity funds.
3. Reduced Incarceration Rates
Incarceration costs are high in almost all countries worldwide. In fact, the cost of imprisoning just one person is equal to a whole year’s paycheck or even two times that. A 2014 Edmond Sun’s report shows that the Canadian government was spending around $118,000 a year for each of the jailed persons in its federal prisons, including those incarcerated for minor drug offenses. Global incarceration rates have been on an upward trend, and the money governments are spending to incarcerate people could significantly reduce global poverty. People have been incarcerated for several years for having marijuana, while others have been hit with a 25-year sentence for growing it. When you consider the number of people serving jail terms for marijuana-related offenses and the cost of keeping them there, you’ll be surprised. Besides lowering incarceration costs, cannabis legalization and the recreational marijuana market paves the way for a complete restructuring of the global legal systems. Countries could dedicate the money saved to other areas like health, infrastructure, and education.
4. Increase in Tax Revenues
Tax revenue is probably the most straightforward global economic benefit of the recreational marijuana market. According to the Marijuana Policy Project (MPP), states earned collective total tax revenue of $6.59 billion from legal, recreational marijuana sales as of November 2020. Between April 2019 and March 2020, Canada’s government earned C$32 ($23.7 million) in tax revenue. While the marijuana tax revenue accounts for a small portion of the government’s entire tax revenues for the period, it’s a sign of growth in Canada’s cannabis tax income. These figures show that recreational marijuana can be a reliable source of tax revenue for many governments worldwide.
The recreational marijuana market positively impacts the global economy. It creates jobs, labor income, and investment opportunities. It also generates tax revenues and lowers incarceration rates.