Economic Benefits of the Medical Marijuana Industry in California

Medical Marijuana Dispensary

Medical marijuana dispensary on Ventura Boulevard in the San Fernando Valley—Los Angeles, California. Wikimedia Commons image

There are no doubt economic benefits to the trade and industry surrounding medical marijuana in California, a state which CNBC once reported that boasted one-third of the production of domestic U.S. pot. Though California may be passing more than just medical allowance legislation, but full legalization it has been reported. Medical use was a test case for California, but nationwide more states are passing recreational use laws and they are seeing the revenue pile up on the positive side of the books in their states. California will likely too cash in on the weed trade to pick up revenue streams from a growing business with investment opportunities. The shock period is over. California was the first to pass legislation defying federal guidelines. It would seem only sensible they embrace the spirit. It will be a crucial moment in 2016 for the US pot cash crop.

A Harvard economist reportedly wrote a paper that claims the federal government could save more than $13.5 billion by eliminating marijuana prohibition and taking in more tax revenues from cannabis sales and the economic activity resulting from its production. The economist’s name is Jeffrey Miron and he gained support from several hundred of his peers.

According to the report, Oakland brought in a total of three percent of the city’s budget, or $1.4 million, in tax revenues from the dispensary activity. Those figure only account for the medical marijuana industry. Imagine the increase from recreational use. Maine, Oregon and Colorado have all benefited from added tax revenue resulting from regulated cannabis in their states. California, though, is by far the largest shark in the tank out of all of the states in the US. The experience is there. The customer marketing base is there. The talent is there. The operations are expecting it to happen and most notably, the money and investment is already there. The tech industry in California even desperately wants in.

California maybe will be or already is seen as a leader in the movement to legalize, regulate and operate medical (and possibly recreational) marijuana enterprises. Big tobacco, by contrast, is also feasting their eyes on California to await a coveted move into recreational sales. There will, by nature of the beast, be a certain dichotomy between legitimate medical users and tried-and-true stoners that just want to get baked. However, this dilemma also exists within the established pharmaceutical industry. California will have the opportunity to influence (as it already has) the rest of the country and its industries state by state in how they do business. There will be much more influx of capital investment in California as a result, that is if they play their cards right.
In fact, much of the savings, as California too well knows, comes from a decrease in enforcement costs and keeping people that are mostly non-violent in the corrections system, as one economic authority on the subject reports. Those elements come with heavy price tags for society.