Cannabis legalization has America’s attention. A Gallup survey has shown that two-thirds of Americans want cannabis legalized now. Even presidential candidates and celebrities are showing support. Furthermore, marijuana legalization is spreading its roots globally—Mexico could be next. However, Donald Trump is still quiet about the topic. What could convince the US to take action? Let’s see.
What could convince the US to legalize cannabis?
A New Frontier Data report released Wednesday discusses the benefits of federal-level marijuana legalization in the US. The most crucial benefit the US should consider is the generation of employment and tax revenue. The report suggests that cannabis, if federally legalized, could produce close to $130 billion in additional tax revenue and over 1 million jobs nationwide. Currently, only 33 states and Washington, DC, have legalized medical marijuana. Ten states and Washington, DC, have legalized recreational marijuana. These states are seeing cannabis tax revenue.
In the press release, New Frontier Data founder and CEO Giadha Aguirre de Carcer said, “With so much speculation about economic slowdown, the potential for federally legal cannabis to create up to a million new jobs and close to $130 billion in tax revenue is likely going to be of interest to regulators and presidential candidates in 2020.”
The report’s findings
The New Frontier Data report suggests the following could occur if cannabis were legalized federally:
- All 50 US states would generate 1.63 million jobs by 2025.
- There would be more legal and regulated cannabis businesses.
- Total tax revenue generated from 2018 to 2025 could reach $73.7 billion, assuming a 15% federal sales tax.
- Total combined taxes generated could reach $175.8 billion between 2018 and 2025.
Benefits of medical marijuana
The CBD (cannabidiol) component of marijuana has been found to have numerous health benefits. In May, Vox discussed how research has shown marijuana could help with various medical problems, including pain, nausea, inflammatory bowel disease, post-traumatic stress disorder, Parkinson’s disease, epilepsy, and multiple sclerosis. A Harvard study has also discussed the medical benefits of CBD.
Furthermore, public support to legalize medical marijuana is on the rise. According to a 2010 Pew Research Center survey, close to 73% of Americans support medical cannabis. Furthermore, Grand View Research shows the medical marijuana market held the largest share of the legal cannabis market last year. It estimates the medical marijuana market could grow 12.7% compounded annually by 2025.
As many big cannabis players have identified CBD’s benefits, they plan on expanding their CBD business to cash in. Canopy Growth (CGC) (WEED) is conducting clinical trials to understand CBD’s effects on human and animal health. In a partnership with Martha Stewart, Canopy plans to launch various CBD-based products. Recently, the company also acquired BioSteel Sports Nutrition to expand its CBD-based beverage product line. Aphria (APHA) is also developing and growing a range of CBD products in Germany this year.
Aurora Cannabis (ACB) has partnered with UFC (or Ultimate Fighting Champion) to conduct more research and understand the effect of CBD for treating pain in high-performance athletes. All three companies are gearing up for Cannabis 2.0 legalization this month. In September, Canopy fell 2.5%, while Aurora declined 20.1%. Aphria fell 17%.
If Trump were to realize the benefits medical marijuana has to offer, he may support full-scale legalization. However, before making any decisions, the White House would need research conducted, which isn’t possible without federal-level legalization.
The cannabis industry is recession proof
The cannabis industry: An evolving industry
Marijuana is an evolving industry with vast growth opportunities. However, growth is slow, and regulatory concerns pose hurdles. As regulatory matters also prohibit many cannabis companies from operating freely in the US, investors can’t capitalize effectively. Grand View Research estimates the legal marijuana market could grow 23.9% compounded annually to reach $66.3 billion by the end of 2025.
Various factors have taken a toll on the industry this year. However, with 2020 presidential candidates’ support for legalization, things could turn around soon. Wisconsin, Pennsylvania, and South Dakota are also set to legalize.
By considering the advantages of legalizing marijuana in the US, Trump could benefit the US economy and fire up his re-election campaign. Mexico’s also set to legalize cannabis soon. If these reasons aren’t good enough, what else could convince the US to act? Stay tuned for more cannabis sector updates.