5 Top Economic Reasons Why Marijuana Was Legalized
The legalization of marijuana in some parts of the world has caused considerable controversy. In America, where 33 states have already legalized medical marijuana and 10 for recreational use, it is still considered illegal under federal law. The UK has a significant presence in the medical marijuana arena as the world's largest exporter, which comes as a surprise considering the anti-legalization stance of the British government.
Despite the controversy, there are distinct economic advantages to be gained from widespread legalization of both medical and recreational cannabis and here we list five of them:
1. It would raise substantial revenue for governments
The most obvious benefit of the legalization of marijuana is that it could be taxed to create significant revenue for governments. According to a report published by New Frontier Data in 2017, the immediate legalization of marijuana in America would have created an estimated $131.8bn in aggregate federal tax revenue collected that year through to 2025. A report in The Guardian revealed that legalizing marijuana in the UK would earn the government a staggering GBP 3.5bn a year in tax revenues.
2. Legalizing cannabis would create a lot of jobs
Another benefit of legalizing marijuana would be the widespread creation of jobs. Although at just 4% unemployment isn't an issue in the UK, should marijuana be legalized it would immediately create a demand for both skilled and unskilled labor that would reduce unemployment even further. The cultivation, processing, and distribution of marijuana require significant manpower.
Many people are unaware of the diversity of marijuana-related products there are available including edibles and beverages. The potential for associated or "spin-off" markets is huge and legalization would significantly boost job growth as well as tax revenues for the British government.
3. Investors could benefit from the long-term growth of the legal pot industry
Another economic consideration for legalizing marijuana is that it would provide another sector to investment markets. There is huge potential for growth in legalizing marijuana which would provide plenty of opportunities for investors to profit. Legalizing marijuana could lead to an internationally traded market in related stocks, trusts, and funds which could produce opportunities to yield double-digit returns for many years to come.
4. Millions saved in law-enforcement costs
Because marijuana has yet to be legalized in the UK, a huge amount of public expenditure is used to police the illegal market. A recent study suggested that legalizing marijuana in the UK would save a total of GBP 291m in related costs to the British justice system. In the States, it is estimated that federal legalization of the substance would lead to a saving of a staggering $3.6bn every year in legal costs.
5. A long-term reduction in cannabis prices
When something is only available on the black market, it tends to be extremely expensive. Oftentimes, people won't actually get what they are paying for. Legalization of marijuana across the board would have the effect of reducing its costs to users and make medical products such as the synergy extracts CBD pen more accessible to people who really need them. Although this isn't necessarily an economic benefit of legalizing marijuana, it provides a distinct advantage for medical patients.