Seeing Green: Why Legalization In California Is Such A Big Deal
The total economic output of California last year was pegged at $2.46 trillion.
That means that California is the 6th largest economy in the world, behind China, Japan, Germany, and the UK. This reason alone is why legalization of cannabis in the Golden State is so historic and important. It’s because cannabis will eventually be regulated just like alcohol. Legalization of marijuana in the world’s 6th largest economy translates to billions of dollars.
Prop 64 won with 56% of voters supporting it and 44% opposing it. Retail sales won’t take effect until January 1, 2018 although as of November 9, state residents and visitors can already begin consuming the plant. However, they won’t have anywhere to actually buy it until January 1, 2018. So the revenue won’t be seen till then either. But when the greens start pouring in, the Golden State can expect to see $1.5 billion pumped into the legal marijuana markets. By the end of 2019 these figures are expected to reach $3 billion, according to ArcView Market Research and New Frontier Data.
California will be seeing green pretty soon with all the expected influx of cash from the legal cannabis market. Prop64 includes 2 kinds of taxes that apply to cannabis:
Local governments also have the liberty to create additional taxes where they see fit but they also have the ability to go tax-free if they want to push the marijuana industry’s growth even further. These figures translate to income that could reach anywhere from hundreds of billions of dollars or even $1 billion each year. This doesn’t even consider the millions of dollars that California will be saving from a drop in criminal justice.
If the sales estimates are right and we begin seeing $1 billion in revenue, it could also happen that America’s big banks might finally start paying attention and, although reluctantly, open up their services to cannabusinesses. It would be difficult for banks to ignore the possible benefits they could gain from finally opening up to the marijuana industry. It could serve as the tipping point for banks, especially when the sales reach numbers that are so high it would already be impossible for businesses to deal only in cash.
Aside from the financial benefits that the legal marijuana could bring to California, we could also possibly see much more innovation and new jobs created in marijuana businesses. The industry will also likely have access to more mainstream venture capital, which will attract bright minds from established industries that California has long supported including agriculture and tech.
But more important than anything, legalization will definitely benefit the medical community. California is the center of biotechnology, home to thousands of doctors and scientists who want to do trials that will allow them to prove the therapeutic benefits of marijuana and explore the many other cannabinoids in the plant that we still know nothing about. Legalization of marijuana gives the medical community some sort of insulation, allowing them to comfortably and safely conduct trials that can result in medicinal breakthroughs and saving more lives.
The Golden State has long been a leader when it comes to social progress in the United States particularly when it comes to marijuana. Many people have even said that eventually, California could be to cannabis what Detroit is to automobiles. Despite the fact that Prop64 still won’t allow people to consume the plant in public, and no law ever has, it’s not unusual to smell pot when you’re walking along the streets of California’s cities. Proposition 19 wasn’t successful but mostly it was because of bad timing and experts believe that cannabis measures will get more support from the people when it’s a presidential election because of a higher voter turnout. Colorado paved the way two years later when it became the first government in the world and the first state in the country to successfully create and regulate a legal marijuana market. For other states that already have regulated cannabis programs in place, so far they have seen very few consequences. While this can still change anytime in the future, this just goes to show how law enforcers and lawmakers were so wrong when they thought that legalizing marijuana will only result in chaos.
Californians represent around 12% of the entire American population, and now that they’ve chosen to legalize marijuana we can easily look at all states going legal by 2020 provided that they set a good example with regulation and managing the financial obstacles that businesses are facing.