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A 2018 report titled Cannabis in the U.S. Economy: Jobs, Growth, and Tax Revenue by New Frontier Data found that cannabis legalization could create one million jobs by 2025. Cannabis jobs include budtender, grower, extraction technician, manager, trimmer, edibles chef, and so many more. According to the analysis, the U.S. would get $131.8 billion in federal tax revenue over an eight-year period.
Cannabis Industry Growth
Financial success in the cannabis industry extends to many other industries that support the growing, testing, sale, and distribution of cannabis and cannabis-infused products. For example, cultivation facilities boost real estate, lighting, and irrigation industries. Retail shops require contractors, security, and accounting services to keep the business running. Some states have even experienced a significant tourism boost for unique cannabis experiences.
The 2018 report found that there would be more than 782,000 additional jobs added across the country if cannabis were legalized. Despite the estimated job growth in the hundreds of thousands of positions, the study suggests that about 25 percent of the pot market would still be illegal. New Frontier analysts suggest that the black market could diminish if businesses aren’t taxed too heavily.
The study claims that full legalization would increase the number of businesses and consumers participating in the market. For job seekers, that also means more employees on company payrolls. The study found that full legalization could result in $4 billion in payroll taxes. Payroll deductions would increase to $5.9 billion by 2025.
Increased Job Opportunities
Based on the report’s predictions, cannabis jobs would significantly increase if the nation chooses to legalize adult-use marijuana. The cannabis industry requires a large network of industries to manage the product from seed to sale. In particular, here’s how many jobs were expected to be created with full cannabis legalization.
- 363,949 (35 percent) retail operation jobs
- 228, 768 (22 percent) administration jobs
- 166,376 (16 percent) manufacturing jobs
- 155,978 (15 percent) management jobs
- 124,782 (12 percent) agriculture jobs
Since the study was released, some states have set-up their adult-use markets and some are ramping up for imminent sales. For example, Illinois is expected to open a few dispensaries and plenty more on the way. Governor J.B. Pritzker said at a bill signing, “over time we expect cultivation jobs to double and new jobs in this industry will number in the thousands.”
In Michigan’s developing recreational market, companies are already vying for talent. Jobs fairs in the state are eagerly hiring cultivation and processing jobs. Nonprofit organizations are also helping individuals with resume workshops designed to boost job participation in the emerging market. Michigan’s $1.6 million sales during the first week of legalization indicate that the state retail market is set to thrive.
Untapped Tax Revenue
New Frontier’s data reveals that if all 50 states legalized cannabis, there would be an infusion of $131.8 billion in federal tax revenue between 2017 and 2025. The estimates are based on a 15 percent retail sales tax, payroll tax deductions, and business tax revenue based on a 35 percent business tax. Of the total revenue, the federal government would get $51.7 billion in sales tax from the legal weed market between 2017 and 2025. Currently, cannabis businesses can’t be federally taxed.
New Frontier CEO Giadha Aguirre De Carcer told The Washington Post that “if cannabis businesses were legalized tomorrow and taxed as normal businesses with a standard 35 percent tax rate, cannabis businesses would infuse the U.S. economy with an additional $12.6 billion [in 2018].”
Americans Support Legalization
A record number of Americans now support full cannabis legalization more than ever. Recent studies show that 91 percent of Americans support some type of cannabis legalization. A Pew survey showed that 59 percent of adults supported cannabis legalization for medical and recreational use, while 32 percent only wanted medical use laws.
A younger demographic is becoming more open-minded about cannabis for recreational and cannabis use. Boomer or Silent Generation consumers have also increased their support for cannabis legalization. It’s come to a point where the issue of legalization has gone beyond partisan lines. American lawmakers are closer than ever to finding a solution to the inefficient drug laws and finding a way to move forward with marijuana legalization.
Currently, 11 states and Washington, DC, have legalized recreational cannabis and 33 states have passed medical marijuana laws. In October 2018, Canada became the first G7 country to legalize weed and Mexican lawmakers are urging Congress to pass legalization laws, as well. In the U.S., marijuana reform bills are inching forward in Congress showing a willingness to change the status quo.
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