Taxes are the Reason: Legalization in 9 states could be worth $8B

Marijuana-legalization initiatives being decided by voters in November could provide a $7.8 billion economic jolt to the nation’s economy by 2020, says a study reported on by USA Today.

Marijuana remains illegal at the federal level, but voters in nine states this fall will decide whether to loosen their own restrictions, with California having potentially the largest impact.

Californians are voting whether to permit recreational marijuana cultivation and use, along with creating a complex system to regulate and tax cannabis, which is already widely grown and sold illegally. Arizona, Maine, Massachusetts, and Nevada are voting on similar measures. Meanwhile, Arkansas, Florida, Montana and North Dakota voters will decide about medical marijuana programs in their state on Nov. 8.

A state-taxed marijuana marketplace could generate $1 billion in taxes in the Golden State alone, says the report from New Frontier Data and Arcview Market Research. The entire market, which includes those states where medical or recreational marijuana is already allowed, could be worth $20.6 billion by 2020, the report said. The legal cannabis market was worth about $5.9 billion last year, the report said.

“The cannabis industry is one of the fastest growing sectors in the economy and continues to astonish those in and out of the space,”  Giadha DeCarcer, New Frontier’s CEO, said in a statement announcing the study.

25 states now permit some form of medical marijuana use, while four – Colorado, Oregon, Alaska and Washington – also permit recreational use. The District of Columbia also permits both medical and recreational use, but sales are prohibited and not taxed.

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