Legal cannabis adds $2 billion to Wash. state economy, report finds

Washington state's cannabis industry has grown at a "staggering rate" since the drug was legalized, adding an estimated $2 billion to the economy and generating total tax revenues of more than $883 million, according to a new report.

The report, by Washington State University, also found that the cannabis industry can grow even more with new innovations and nurturing from state lawmakers.

The report is the first to detail the positive economic impacts associated with the state’s newest agriculture industry. It was compiled by WSU's Impact Center for the Washington State Cannabis Alliance.

“This is a tremendous peek under the hood,” said Caitlein Ryan, interim executive director of the Alliance. “It’s easy to see how much the industry has grown and now contributes to the state’s economic well-being."

She added, “These findings also clearly tell us that the industry has grown at a staggering rate, adding nearly 20,000 jobs to the private sector, and hundreds of millions of dollars to the state’s economy. And there is still substantial growth to come, as the industry matures.”

Among the findings of the report, marijuana excise taxes are the fastest growing component of the state’s general and selective sales tax revenue streams, based on retail cannabis sales that have grown 605% between 2015 and 2020.

In spite of the impressive growth rate, Washington still lags behind sales in Colorado by nearly 10%. One possible source of “additional energy,” according to Ryan, is passage of a proposed bill that would allow individuals to grow up to six plants in their home, for recreational purposes, with allowances for 15 plants per household.

The bill won approval from the House Commerce and Gaming Committee earlier this month and is before the House budget committee.

“This opens the door to the same kind of explosive growth that the craft beer industry experienced in recent years,” Ryan said. “There is untapped potential here – in the home – to foster innovation, and improvements in quality, for example, that will further lift the state’s overall economy."

The study concluded that home growers likely do not pose a threat in terms of lost revenues to the existing retail market. Rather, the study suggests that an innovative home grower community “compliments the existing retail market."