It’s no secret that the cannabis industry is bringing in all kinds of money for the industry, but now, there are official numbers backing it up. Even without full legalization, legal cannabis is reportedly poised to bring in almost $100 billion to the US economy in 2021.
This is up 30 percent from last year, and the projected number for 2025 is $169 billion. According to the MJBizDaily analysis, this was done by looking at similar industries and using a standard multiplier of 3.5 on projections of sales, and it includes agriculture, manufacturing and retail activity.
When examined closely across the board, this shows what the future of cannabis will look like and how it will be able to continue to benefit the US economy as the years go on. In this particular instance, the analysts predicted that for every $1 spent by consumers and patients in the retail and medical markets, an additional $2.50 gets put back into the economy. This also has a major impact on local economies throughout the country.
This is the case because of the daily needs of workers in the industry, including spending on housing, transportation, food, and entertainment. By adding more jobs to the legal and regulated cannabis industry, cannabis keeps on giving back and helping to boost the local, state, and national economies.
Additionally, the taxes generated from selling recreational and medical cannabis also puts hundreds of millions of dollars into the economy via taxes, which in turn go back to fund local government and state activities. How those tax dollars are funneled back into the local area varies state to state, but some popular uses are funding schools, roads, and addiction treatment programs.
Now, because of the legal cannabis industry expanding and causing a boom in many states, there is other growth in real estate, retail, manufacturing, and agriculture in states that have legalized the plant. Many businesses and people move to legal areas because of the existence of recreational and/or medical cannabis markets.
Similarly, money comes in from investments in equipment and technology necessary to run grow facilities and processing plants.
US Economy on Local and State Levels
Of course, this breakdown depends on different things, including the size of the market in states, whether or not they allow recreational cannabis, how big the medical market is and how long cannabis has been legal.
Some states that are no strangers to legal cannabis have seen a serious boom lately, including California, the largest cannabis market in the US. The industry is expected to bring in around $20 billion for the state in 2021. Colorado, Illinois, Oregon and Washington are each expected to be closer to $10 billion. Now that new industries of a similar size are coming on line, including New Jersey and New York, similar amounts are expected to be generated by those areas. These high-population areas are bound to have a lot of cannabis spenders.
Additionally, while other states may have smaller populations, they can still see a big impact from legal cannabis. Nevada is expected to add about $1,917 to the economy per person who consumes and buys cannabis. Alaska, Colorado, and Oregon are expected to generate about $1,500 per person. California will contribute about $500 per person, but overall, their industry is still in the leads.
It’s difficult to say exactly how much the industry will benefit going forward, as it remains to be seen exactly who will legalize when, and when or if federal legalization will happen in the coming years. Still, the fact remains that the numbers now are monumental, and looking forward can give more insight into what the industry could have to offer in years to come.