The Economic Impact of Medical Marijuana

The Economic Impact of Medical Marijuana

Many more states in the United States and western countries began to regulate the usage of marijuana for medical purposes. The major idea of legalizing medical marijuana stemmed from the impossibility of distinguishing the patients from using marijuana as a medical purpose or committing a crime. Legalization of medical marijuana definitely brings economic impact on society, whether positive or negative. Despite different political views, beneficial economic impact of medical marijuana legalization is expected.

The state of California first took a move on legalizing medical marijuana in 1996. Since then, other states followed in action. In case of Florida, predictions about the magnitude of the economic growth due to medical marijuana legalization are close to $1.6 billion by 2020 (New Frontier Press, 2016). A 2015 study conducted by Golzar estimated the budgetary implications of legalizing marijuana in the state of Florida. Through the study, the combined “annual savings and increase in tax revenue that would come from legalization would total $145.7 million in the short run and $285.5 million annually in the long run” (Golzar, 2015).

The economic impact of medical marijuana usages comes from different factors including: increases revenues without tax, increases job creation, and decreases in government spending. Every states which legalized medical marijuana enjoyed higher tax revenue after the law enactment.

<Sales Number of Medical Marijuana in the U.S.>

Arizona $406.7 million Minnesota $9.6 million
Connecticut $50 million Montana $31.8 million
Delaware $7.1 million New Hampshire $7.2 million
Florida $17.4 million New Jersey $37 million
Hawaii $17.2 million New Mexico $54.2 million
Illinois $91.1 million New York $40.9 million
Michigan $633 million Rhode Island $60.2 million

Source: Forbes.com

Many states have experienced increase in government revenue due to medical marijuana legalization. Disregard of other factors, only the tax revenue could bring positive economical impact for the society from legalization.

Job creation is another major factor of economic impact that cannabis industry could bring to the society. According to the Bureau of Labor Statistics, the U.S. is expected to experience job decreases in manufacturing industry, utilities, and government jobs by 814,000, 47,000, and 383,000 respectively. One of the industries that would have increase in the number of jobs is healthcare, where cannabis industry is seated. The legal cannabis market was worth an estimated $7.2 billion in 2016 and is projected to grow at a compound annual rate of 17%. “Medical marijuana sales are projected to grow from $4.7 billion in 2016 to $13.3 billion in 2020” (Forbes.com).

In the United States, state and local expenditures attributable to drugs prohibition are as follows. Among all drugs expenditure, which accounts for 29.37% of all criminal justice costs, marijuana comes as the second largest with 6.04% followed by heroine/cocaine with 12.78%. By legalizing only for medical marijuana, tax revenue is expected to surpass the expenditure caused by marijuana prohibition.

South Korea has been known as the place free of drugs. However, the recent data shows that the number of drug users are increasing. After the celebrity scandal with drug abuse, the police announced that it has captured 3,994 drug abusers within three month period from February 25th to May 24th in 2019. Comparing from the past year, the number of convicts has increased by 144.3%, indicating the fact of potential increase in the number of drug users. Among the convicts, approximately 66% accounted for possession, while others were convicted as higher degree of crime such as distribution and consumption.

Although South Korea has passed the law legalizing cannabis for medical purpose only, it is hard to project the conspicuous economic benefit as a society. In 2018, Korea Customs Service interpreted 80 instances of people trying to bring in medical marijuana products at the nation’s airports and seaports.

Despite the fact that South Korea is still a country with rejecting the norm of drug usages within the society, the first step has been taken in East Asia regulating cannabis for medical purposes. Higher knowledge about cannabis regarding health issues and benefits is required to turn the society more acceptable with medical marijuana and increase the industry.

Bibliography

Borchardt, D. (2017, March 01). Marijuana Industry Projected To Create More Jobs Than Manufacturing By 2020. Retrieved from https://www.forbes.com/sites/debraborchardt/2017/02/22/marijuana-industry-projected-to-create-more-jobs-than-manufacturing-by-2020/#440c3c6e3fa9

Economic Benefits of Regulation. (n.d.). Retrieved May 27, 2019, from https://halcyonorganics.com/economic-benefits-of-regulation/

Miron, J. (2018, July 23). The Budgetary Effects of Ending Drug Prohibition. Retrieved from https://www.cato.org/publications/tax-budget-bulletin/budgetary-effects-ending-drug-prohibition

South Korea shaken by rising drug use, celebrity scandals. (2019, May 10). Retrieved from https://www.upi.com/Top_News/World-News/2019/05/10/South-Korea-shaken-by-rising-drug-use-celebrity-scandals/2091557235499/

Joint Economic Committee Democrats(2018, December). The National Cannabis Economy. https://www.jec.senate.gov/public/_cache/files/bf473de9-98bb-4465-a310-de992926409a/national-cannabis-economy-final.pdf

New Frontier Press. (2016, November 8). Medical Marijuana Initiative Passes in Florida. Available at: https://newfrontierdata.com/wp-content/uploads/2015/11/Florida-Press-Release.pdf. Date accessed: April 3, 2018.

Golzar, T. I. (2015). An Economic Analysis of Marijuana Legalization in Florida (Doctoral dissertation, Duke University Durham). Available at: https://sites.duke.edu/djepapers/files/2016/10/golzar-dje.original.pdf. Date Accessed: April 3, 2018.