Huge population centers on the East Coast are currently on the verge of legalizing marijuana for medical and recreational use. Former New Jersey Governor, Chris Christie, a stern anti-pot leader, has been replaced with Governor Phil Murphy, who has recently spearheaded a successful effort to institute cannabis legalization. Efforts to legalize weed in New York are meeting some resistance, but Governor Andrew Cuomo is committed to legalization for some very good reasons such as to increase tax revenues and to combat painkiller abuse. These two states will add about 28 million potential new customers to the legal pot industry.
The move to legalize marijuana has hit dozens of states. Colorado, Washington, California, and Oregon are proving that legalization didn’t turn these states into lawless havens for drugged-out slackers, and it definitely added to the annual tax revenues and employment rolls. Eventually, dozens more states will legalize cannabis and there will be opportunities in cannabis that have yet to be realized.
Since legalization in 2015, Colorado has enjoyed marijuana-generated tax revenues of $2.4 billion, according to a study by Denver-based Marijuana Policy Group. During the second Quarter 2018, after full legalization, California tax revenues hit approximately $74.2 million. The California Department of Tax and Fee Administration also reported that this Q2 2018 total represents a 22 percent increase from the previous Quarter. The Massachusetts state Cannabis Control Commission found customers spent more than $2 million on marijuana products during the first week of recreational sales alone.
New York is currently struggling with areas of the state that are still resistant. Suffolk County, home of the fabled wealthy resort towns of Southampton and East Hampton, is mounting resistance while apparently overlooking the illegal marijuana use that is an expected part of the Summer beach-and-party crowd that is the life-blood of those towns.
The fact remains that if a state isn’t taking advantage of the move to pot legalization, it will be missing out on a lot of tax revenue that could be funding needed services and adding jobs.
Approximately 38,000 new jobs were created by the legal cannabis industry in California during 2018. Colorado reports 18,000 new jobs have been created in the state since legalization.
An example of the fears associated with legalization is an opinion letter submitted by the New York State Association of Chiefs of Police in January: “New York State is currently battling an opioid epidemic with law enforcement and public health professionals on the front line, and it would be counter intuitive to condone the use of marijuana.”
However, according to the Drug Policy Alliance, “Two studies published in 2018 compared opioid prescription patterns in states which have medical marijuana laws to states which do not. They found that states with medical marijuana laws experience significant reductions in the use of prescription opioids. One of the studies found that states with medical marijuana dispensaries saw 3.7 million fewer daily doses of prescription opioids and states which allowed for home cultivation of marijuana saw 1.7 million fewer daily doses. In states with medical marijuana access, it appears that overdose mortality rates are almost 25 percent lower than in states with no legal access to marijuana, and the reductions in mortality rates strengthened over time.”
By the mid-2020s, the legal cannabis market in North America is expected to reach more than $47 billion, and like tobacco and liquor, its sales will likely be a normal part of daily life.
A potential cannabis entrepreneur might do well to plan a company that will operate on a national or even a global basis. Canada and Mexico are already fully legal with regards to medical and recreational marijuana usage, and the U.S. rapidly heading toward legalization in the remaining half of the states. This means that there will be plenty of opportunities to open cultivation, distribution, or retail business chains spanning those three countries. However, there are likely to be far more opportunities in the service and advice industry surrounding the core cannabis operations.
You did not miss out on the legal cannabis rush. In fact, it is just beginning and it is time to prepare to take advantage of lucrative niches that appear as the industry expands over the next few years.
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