A new report reveals the potential economic impact of federal marijuana legalization.
What if cannabis prohibition no longer existed in the United States? In a new study, researchers set out to answer that question and analyze the potential impact it could make on the U.S. economy.
According to a new report from research firm New Frontier Data, if full federal legalization been enacted in 2018 in all 50 states, “the resulting public support, new market expansion, and strong consumer demand for legalized cannabis programs would have meant 1.46 million jobs today, while creating more than 1.63 million jobs by 2025, meanwhile generating nearly $129 billion in additional tax revenues by the same year.”
As the 2020 presidential election draws near, cannabis legalization is a topic with huge implications on the country and a topic that investors are already said New Frontier Data Founder and CEO Giadha Aguirre de Carcer. Two-thirds of Americans now support legalizing marijuana.
“With so much speculation about economic slowdown, the potential for federally legal cannabis to create up to a million new jobs and close to $130 billion in tax revenue is likely going to be of interest to regulators and presidential candidates in 2020,” Aguirre de Carcer stated in a press release. “Cannabis is already being considered as an investment option for forward-looking portfolio and fund managers as a possible hedge against economic downturn impacting more traditional investments.”
The report takes a thorough look at the what-ifs of federal cannabis legalization. Diving into the impact on federal business taxes, employment payroll taxes, and federal sales taxes, as well as job creation.
Among the study’s findings on the impact of federal cannabis legalization were:
- From 2018-2019, the cannabis industry generated nearly 82,000 jobs.
- Legal cannabis market wages in 2019 totaled to $12.4 billion.
- Full federal legalization would create more employees on official payrolls, resulting in $8.4 billion in payroll taxes.
- If the federal sales tax rate was 15 percent, total revenues from 2018–2025 would climb to $73.7 billion in new revenue for the U.S. Treasury.
- Under full federal cannabis legalization from 2018-2025, the total combined taxes would climb to $175.8 billion.
New Frontier Data, a global cannabis research firm, released the 2019 edition of “Cannabis in the U.S. Economy: Jobs, Growth & Tax Revenue,” in early October. Read the report, here.
Cannabis Industry Job Growth
Despite remaining illegal at the federal level, marijuana has already made a notable impact on the nation’s economy.
A new report from Marijuana Business Daily (MBD) released in June looked at the future growth of cannabis industry jobs under current federal laws. The report projected cannabis employment numbers to grow 34 percent in 2019 over the previous year’s numbers.
Data suggest in 2018, there was an estimated 130,000 – 160,000 cannabis jobs in the country. MBD’s report suggests by the end of 2019, the number of full-time cannabis employees in the U.S. could top 200,000.
With the cannabis boom in full effect and no indications of slowing down, MBD’s 2019 Marijuana Factbook predicts that the number of jobs for people working in the cannabis industry will reach between 385,000 and 475,000 by 2023.
Marijuana for medical purposes is currently legal in 33 states and legal for recreational use in 11.
More Cannabis Industry News
To find more reports on cannabis business, visit our Cannabis and Marijuana Business News page.
For the latest cannabis news, visit our news page where each week we release reports on cannabis business, scientific research, and policy.