Following Uruguay’s lead, Canada recently became the second country in the world to federally legalize adult-use cannabis. This measure will allow the country to capitalize on substantial economic opportunities, propelling it towards becoming the cannabis capital of the world. Meanwhile, just south, the United States struggles to find a balance between federal and state policies. Global spending on legal cannabis is expected to reach $63.5 billion by 2024 which will almost exclusively flow to Canada. This means the U.S. is leaving copious amounts of cash on the table until the day federal legislation classifies cannabis as a Schedule 1 drug.
Before the legalization of cannabis in Canada, anticipation alone created a financial boom not seen since the dot-com mania of the late 1990s. Canadian investors began plowing millions of dollars into cannabis companies, without having recording profits yet. And they are not alone, American companies are also jumping on the bandwagon. There is a new wave of American companies becoming publicly listed in Canada for valuations approaching those of their Canadian counterparts. The only chance the U.S. has is to slow and ultimately stop this trend is the legalization is adult-use cannabis.
There are a few areas of the economy that would benefit most from adult-use cannabis sales: trade, taxes and job growth. The categorization of marijuana as a Schedule I drug alienates the U.S. economy from a lucrative global trade market. Legalizing cannabis on a federal level would enable the U.S. to enter the worldwide market for the plant itself as well as products derived from its compounds. The U.S. could trade cannabis plants with its neighbors and NAFTA partners Mexico and Canada, in addition to countless other international markets where cannabis is medically legal.
In addition to the international revenue plant trading would generate for the U.S., with the legalization of cannabis on a federal level, the government could tax cannabis sales and profit from the plant. Colorado provides informative and promising statistics that reflect the potential for the U.S. as a whole. Since legalizing cannabis for adult-use, Colorado has generated more than $500 million in tax revenue. A perfect example is Pueblo County. In a landmark report out of the Colorado State University-Pueblo’s Institute of Cannabis Research, researchers found that a taxed and regulated cannabis industry contributed more than $58 million to the local economy, reports The Denver Post.
Additionally, New Frontier Data projects that if legalization were to occur in all 50 states today, there would be access of 654,000 jobs, and would increase to 1 million by 2025. ZipRecruiter chief economist Cathy Berrera says, “Year over year growth of job posts in the cannabis industry is outpacing both tech (254% growth) and healthcare (70%).” This is a direct result of the vast amount of jobs in the industry, such as growers, extraction technicians, harvesters, marketers and budtenders, to name a few. There is no shortage of opportunities in the industry whether you touch the plant or not.
Legal cannabis in Canada will be an economic experiment, but it seems it will be an experiment that has the potential to pay off in a big way. Adult-use cannabis will undoubtedly improve the country’s economy and would do the same for the U.S. The U.S. missed out on the opportunity to become the first G7 country to legalize cannabis and reap the benefits that will come with it, but it’s not too late. The fact is, Americans now support legalization at historically high rates. A CBS News survey found that 59 percent of Americans think cannabis should be legalized. At this point, it not a question of “if” but of “when.” And the good news is when it does occur, the U.S. will have the benefit of using Canada as a model for best practices, eliminating some trial and error.