In 1996, California was not the only state in the United States of America (USA) heading for the legalization of Cannabis for medical usage; Arizona was also on the same track. However, Arizona receded the decision due to conflict with federal law. California gave birth to hemp legalization in the USA. Since then, the cannabis industry has created hundreds of jobs in the USA. The ability of cannabis-related businesses to positively impact a country’s economy is not just limited to the USA. Over a while, many developed nations have embraced cannabis legalization for medicinal, industrial, and recreational purposes. The resultant has brought more taxes to the government and offered quality products to consumers while enabling added income to farmers.
To understand the growing impact of Cannabis businesses, let’s deep-dive and look into these four areas.
A growing consumer market is a strong indicator of the rising demand for particular products. Given the stringent regulation, the black market has thrived for cannabis products’ supply, majorly recreational usage. However, with the legalization, the Cannabis industry has become one of the fastest-growing business segments.
Prohibition Partners, one of the leading Cannabis market research and consultancy firms, forecasts that the legal Cannabis market will be worth US$ 103.9 billion by 2024. The numbers are pretty bullish, given that the post-prohibition era cannabis medication is still at its early stages. Europe, North America, and Canada will collectively capture 74.1% of the total market share. In contrast, the rest of the world will address the remaining 25.9% of the market share. The medicinal and recreational market will be worth US$ 62.7 billion and US$ 41.2 billion, respectively. The demand and acceptance of Cannabis medication are soaring worldwide.
Worldwide, Cannabis enthusiasts are confident that cannabis businesses will directly increase farmers’ income. However, the notion will only get validated when it will go through a testing time. The covid-19 crisis has been a very testing time for the business. In the first half of 2020, Cannabis sales soared in Canada. In March, Canadians bought US$ 137 million worth of Cannabis products. The strong Cannabis sales resulted in a 5.2% increment in farm cash receipts (crop and livestock sales) compared to 2019 for Canadian farmers. Without the Cannabis sales surge, the farm cash receipt would have increased just by 0.8%. The data clearly outlines the benefits the legal Cannabis industry possesses for the farming community.
Taxes are one of the significant sources of revenue for governments. Whether collected directly from individuals or indirectly, they are the corpus government use for various policy implementation. A lot of countries are collecting millions of Cannabis taxes. Canada, which legalized Cannabis for medicinal, industrial, and recreational usage, has earned US$ 140 million in taxes in the first few months since legalization. Since October 2018, the legal cannabis industry has added US$ 3.96 billion to Canada’s gross domestic product (GDP), while the illicit market has added US$ 4.13 to the GDP.
The states of the USA are on a spree of legalizing Cannabis for recreational purposes. On the opening day of pot sales, Maine sold Cannabis worth nearly US$ 100,000, bringing US$ 9,464 in taxes. Collectively California, Colorado, Washington, Oregon, Nevada, Alaska, & Massachusetts have earned US$ 1.6 billion in taxes in 2019 and US$ 4.1 billion in taxes in a lifetime.
Recreational Cannabis is illegal in India; however, Cannabis remains one of India’s most trafficked narcotic substances. Delhi and Mumbai can add US$ 190 million per year to Cannabis taxes. However, all the recreational Cannabis money flows into the hand of the illicit market.
Unemployment is currently a big issue globally. Creating jobs is one of the main agendas that leaders pitch at all the election rallies. Whether in India or the USA, every political leader promises to create more jobs. However, the Cannabis industry has significantly contributed to creating new jobs. According to Leafly Job Report 2021, the legal Cannabis Industry has created 321,000 jobs in the USA. The cannabis industry is the fastest job-creating market in the USA.
Interestingly, as per the US Bureau of Labour Statistics, more American cannabis workers are there than electrical engineers. The sector expects to employ 414,000 Americans by the end of 2021. The icing on the cake is that the Cannabis industry offers 11% more salary than the US median salary. On a global scale, the Cannabis workforce will be 743,000 strong by 2025.
Given that legal Cannabis is good for the business and the economy, it still faces challenges. It has not become a mainstream and widely accepted commodity. In Canada, where Cannabis is legal for medicinal and recreational purposes, the black market is still thriving. It constitutes nearly 54% of the sales. Governments across the globe should channelize the opportunities of the legal Cannabis market. The flourishing of Cannabis driven economy will only result in enhanced tax collection, more job creation, better products for consumers, and an increase in farmers’ income. It is a win-win proposition for all stakeholders.
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Key Insights from The Global Cannabis Report by Prohibition Partners. [Link]
Isreal medical cannabis patient count hits record as import soar. [Link]
Canadian Cannabis Sales Rise 19% During COVID Response. [Link]
Cannabis steers healthy increase in agriculture income. [Link]
Legal cannabis contributes CA$2.3 billion to crop receipts in Canada. [Link]
Cannabis generates C$186 million in tax revenue in Canada in first months of legalization. [Link]
Cannabis Canada: Pot Generates $8.16B Toward Canada’s Economy, StatsCan says. [Link]
Maine’s recreational cannabis retailers sell nearly $100,000 on opening day. [Link]
Deep Dive: Recreational Marijuana Tax Revenue in the United States. [Link]
The Dutch state earns 400 million € annually from coffeeshop taxes. [Link]
Delhi consumes more weed than Los Angeles, Mumbai more than London. [Link]
Leafly Jobs Report 2020. [Link]
Cannabis Industry Likely to Employ More Than 400,000 By 2021, Study Projects. [Link]
Cannabis jobs pay 11% more than the US median salary, and demand is up 76%. [Link]
Potential Cannabis Market Job Growth. [Link]
Unregulated Cannabis Sales Command 54% of Canadian Market. [Link]
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