November 16, 2016
Last week’s voting showed a clear and increased interest in legalizing cannabis for both medicinal and recreational purposes. The plant appears to be steadily shaking the stigma that has marred its history, and it largely has Colorado to thank.
While some politicians stick firmly to the notion that cannabis can negatively affect society and the cultural idea of the lazy pothead appears to be going nowhere, what is clear is that the crop is a money maker. Colorado has proved to legislatures and the public that legalizing cannabis can be an essential part of any state’s economy. The fact that Colorado’s economy has grown at twice the national average is a major reason why politicians and many Americans that have traditionally stood in opposition to the crop are becoming more lax.
The Marijuana Policy Group recently released a study – which can be found here – that explored how marijuana has changed Colorado’s economy. Section III of the report describes the Marijuana Impact Model, which was used to determine marijuana’s influence on the economy. This model can also be used in the future to determine the crop’s impact on other states.
Since legalization two years ago, Colorado’s cannabis industry has out performed most of the state’s industries. In sales alone marijuana nearly broke the $1 billion mark. Sales saw a 42 percent increase over the inaugural year, and it is predicted that the demand for legal cannabis will grow over 11 percent each year through 2020.
The Marijuana Impact Model is based off of traditional input-output models, and the study found that legal cannabis-related business had an output of nearly $2.4 billion in 2015.
The reason why legalizing cannabis can be so beneficial for a state’s economy is because it is completely confined to the boarders of that state. This allows the state and its residents to maximize the benefits of the industry and not lose any of the profits to out-of-state companies. In 2015 alone, 18,000 jobs related to the industry were created in Colorado, and, because Colorado gets to solely reap the cannabis rewards, cannabis spending created more employment per dollar and economic output than 90 percent of Colorado’s industries.
The cannabis industry is lucky to have Colorado has a shining example of how legalization can boost the economy. It is also important that the first state to legalize has had such wild success. Colorado has set the standard, and as more states experience economic success, more will want to obtain the economic boost that the cannabis industry provides.