It’s been less than a full week since it’s been legal for adults in California to purchase cannabis for non-medical purposes, but experts are already projecting massive job creation in the state. And California lawmakers are salivating over the new massive new tax revenue stream.
The legalization of adult-use sales in California will lead to the creation of nearly 99,000 cannabis industry jobs in the state by 2021, about a third of all cannabis jobs nationwide, and 146,000 jobs overall when indirect and induced effects are considered, according to a new report released earlier this week. By 2021, direct cannabis industry employment will top 291,500 full-time jobs, with a total employment effect of nearly 414,000 employees across all legal cannabis states.
The upbeat employment data comes from “US Legal Cannabis: Driving $40 Billion Economic Output” report by Arcview Market Research, in partnership with BDS Analytics.
“The economic excitement around the legal cannabis industry is no longer just theory,” said Troy Dayton, CEO of The Arcview Group. “Due to the giant impact adult-use legalization is already having in the United States, it’s vital for key stakeholders to understand the full impact of legalization, beyond just retail sales numbers.”
The 68-page report provides estimates of the total economic contribution, direct and indirect jobs created, and tax receipts generated in each of the 35 states expected to have medical or adult-use legality by 2021.
Among other findings, “US Legal Cannabis: Driving $40 Billion Economic Output” reveals:
- Six of the early movers in legal adult-use implementation (California, Colorado, Massachusetts, Nevada, Oregon, and Washington) will account for more than 60% of that $39.6 billion in 2021 total economic output. Medical-use states will see far less positive economic impact.
- The legal cannabis industry may have been a key factor in lowering Colorado’s unemployment rate to one of the lowest in the nation.
- More than $1 billion in wholesale, excise and cannabis-specific sales taxes were taken into state treasuries during 2016. And that is a conservative estimate.
- The overall tax figure is forecast to grow to just over $1.4 billion in 2017 and then to nearly $2.8 billion by 2021. With additional state and local general sales taxes, that 2021 figure could be between $4 billion and $4.7 billion.
The report also explores the projected decrease in illicit markets, and the budgetary and societal benefits of that decline, as the legal, regulated side of the cannabis industry continues to grow.