In the two years since recreational marijuana sales became legal in Colorado, the state has seen economic growth two times greater than the U.S. national average, according to a new in-depth analysis.
"The Economic Impact of Marijuana Legalization in Colorado," released by the Marijuana Policy Group in October 2016, was created using a new "Marijuana Impact Model" designed to accurately measure the cannabis industry's economic impact on the state.
As it turns out, the positive impact has been enormous. The state saw nearly $1 billion in marijuana sales in 2015, with legal cannabis activities generating a combined output of $2.39 billion. Sales increased 42.4 percent over 2014.
From the report:
"Because the industry is wholly confined within Colorado, spending on marijuana creates more output and employment per dollar spent than 90 percent of Colorado industries ... Legal marijuana demand is projected to grow by 11.3 percent per year through 2020."
In just two years, the marijuana industry has become a major economic force in Colorado, outperforming many other sectors.
From The Daily Sheeple::
"Cannabis now ranks number six in terms of product sales, following closely behind cigarette sales. It beats gold mining by a large margin, and even performing arts and sports venues as well as all non-grain crop farming.
"However, the real impact is seen when put in terms of 'output and employment per dollar spent,' where spending in the cannabis industry outperforms all private industries in Colorado – including coal and other mining, oil and gas, casinos, business services, general manufacturing and retail trade (incl. alcohol)."
Every retail cannabis sales dollar represents $2.40 in state output, and the combined impact of retail sales, cultivation and manufacturing is greater than that of any other entity, including federal government spending in the state.
Cannabis industry created 18,000 jobs in Colorado in 2015
There's also good news regarding employment: The cannabis industry created more than 18,000 full-time equivalent jobs in 2015 – more than two-thirds of them directly related to the marijuana industry, the rest generated by spending on goods and services by the marijuana industry, and through "general spending by marijuana industry employees and proprietors."
The boost in tax revenues for the state has also been astounding. Colorado raked in more than $63 million in 2014, and over $121 million in 2015. The near-doubling of cannabis tax revenues in one year was attributed partly to the skyrocketing increase in sales during the period, and also to higher tax rates for recreational marijuana sales compared to medical cannabis.
"Marijuana tourism" – in which people visit Colorado primarily to sample legal cannabis products – has also fueled the increase in sales.
Is there a downside?
Unfortunately, the rapid growth of the cannabis industry in the state has produced a negative impact for smaller "cannabusinesses," as larger companies have begun to dominate the marketplace.
Certainly, this is partly attributable to natural market forces and competition, but one of the main challenges for the smaller players in the market has been to remain in compliance with the labyrinthine regulatory system put in place by the state. The cost and complexity of compliance has forced many to simply shut down.
The lessons learned from this report could help other states – such as the four that passed recreational marijuana initiatives in the recent election – in forging workable policy strategies regarding regulation, taxation and other areas of concern. The glowing economic growth statistics should also encourage state leaders to embrace this new industry and take advantage of its potential benefits.
Finally, the era of marijuana prohibition appears to be drawing to a close – and that's good news for everyone.