US cannabis industry’s $100 billion economic impact varies by state

May 11, 2023 · MJ Biz Daily

Medical and recreational cannabis markets continue to have a growing impact on the broader U.S. economy, but the state-level impact differs based on each market’s size, maturity and type.

And while highly populated states with bigger markets have a larger dollar amount of economic impact, some smaller, less-populated states are generating more impact per person.

The total U.S. economic impact from marijuana sales in 2023 is expected to reach $100 billion – up more than 12% from last year, according to analysis from the recently published MJBiz Factbook.

For California – by far the largest cannabis market in the U.S. by sales and population – the economic impact from marijuana sales can amount to $17.7 billion pumped into the state’s economy in 2023.

By contrast, marijuana’s contribution to sparsely populated recreational and medical markets is much less, but not insignificant.

Mississippi, which kicked off marijuana sales in January, could expect a $30 million boost by the end of the year.

If we consider the total population of a state, some benefit more than others.

California’s marijuana market might have the largest total impact, but other states deliver more on a per-capita basis.

Alaska, for example, will deliver roughly $1,431 of economic impact per person this year.

And marijuana markets in Colorado, Massachusetts, Michigan, Montana, Nevada and New Mexico will each pump almost $800 per resident into their respective states.

California, which creates almost three times the total dollar amount of impact than Colorado, will contribute a little more than $450 of economic impact per person.

Economic impact comes from different sources – direct and indirect.

Marijuana jobs provide workers with income to spend on necessities such as food, lodging, transportation, entertainment and more.

Cannabis businesses, consumers and patients also pay hundreds of millions of dollars in state and local taxes that are used to fund local government activities, including schools and roads.

State real estate markets also receive a boost from retail, manufacturing and agricultural businesses moving into an area or established companies expanding, increasing broader demand for commercial properties.

Cultivating marijuana can require large investments in equipment and technology that boost not only the local economy but also areas throughout the United States.

The list goes on.

The marijuana industry’s unique structure – which encompasses agriculture, manufacturing and retail, in addition to ancillary businesses such as lighting supplies and legal services – makes these projections a best guess.

The economic impact of the marijuana industry is not the same as supply-chain revenues that are often used to estimate the “total size” of an industry.

Rather, the economic multiplier paints a picture of the impact the industry has on the broader economy.

In this case, for every $1 consumers and patients spend at retail locations, an additional $2 will be injected into the economy, much of it at the local level.

Using the same standard multiplier of 2 can also offer insight into the local-dollar impact from sales of recreational and/or medical marijuana.

To be sure, using the multiplier method for local impact analysis isn’t perfect.

State regulations and taxes along with other market variations can drastically increase or reduce the dollar amount marijuana sales put into the economy.

While it might be hard to adjust for those disparities, the estimates give us a good look at how the industry is contributing to the overall economic picture. (Full Story)

In category:Business
Next Post

How Automation Can Future-Proof Manufacturing

In 2014, Colorado made history as the first state in the country to open recreational dispensaries for legal cannabis sales. No one really knew what to expect, but one thing was clear right away: The infant industry was growing fast.…
Previous Post

Green Market Report Women’s Leadership Awards: Kassia Graham

Graham sees opportunity for both legacy operators and newcomers, but warns against opportunists. Social Impact: Kassia Graham, Cannaclusive Kassia Graham, a vocal advocate for diversity and equity in the cannabis industry, is using her platform to affect change. As the…
Random Post

Drug Testing Access at Australian Festivals May Have Prevented Past Deaths

It’s already fairly well known that music festivals tend to come with plenty of illicit drug use. The activity is so common at festivals, and in dance scenes as a whole, that organizers and attendees alike are becoming increasingly more…
Random Post

Latest Luxury CBD Beauty Products

Today, August 8, marks National CBD Day, a day where CBD enthusiasts can take an extra moment to appreciate this special cannabinoid that’s gained so much popularity over the past five or so years. With CBD’s wide range of applications,…
Random Post

Search Is On For Psychedelic Patents & FDA Designations, 3 Companies Share News

Drug discovery company Mindset Pharma  MSSTF has been greenlighted by the US Patent and Trademark Office (USPTO) on its application “Psilocin Derivatives As Serotonergic Psychedelic Agents for the Treatment of CNS Disorders.”  The application includes the company’s psilocybin analogs lead drug…
Random Post

LOCALIZE IT: Communities Consider Legalizing Psychedelics

A small but growing movement is pushing to decriminalize the use of psychedelics like “magic mushrooms” and ayahuasca. Colorado in November passed a ballot initiative to decriminalize psychedelic mushrooms for people 21 and older. It joins Oregon in establishing a regulated…