How Legal Cannabis Could Revive Southern Economies
The global economy has been experiencing one of the most turbulent economic crises in the last decade, with the after-effects of the COVID-19 pandemic and the ongoing war in Ukraine. American states are not left out of this economic downturn; however, most state governments are searching for ways to improve their current sources of revenue. To most of these states, the cannabis industry has proven to be a legit way to replenish dwindling budgets, create jobs, and fund social and educational programs in disadvantaged communities.
To Southern states, this current situation is akin to what they faced during the Great Depression many years ago. Records show that alcohol decriminalization was one of the most important solutions that brought these states out of this depression. Today, in the same vein, cannabis decriminalization is considered one of the government's solutions out of this economic hole. This is a win-win for everyone— residents stop bearing the brunt of the unjust policy of cannabis prohibition, and governments receive millions in revenues from cannabis sales.
Current Level of Cannabis Decriminalization
In February, Mississippi became the latest and 37th state to decriminalize cannabis for medicinal purposes. Mississippi is one of three deep southern states to approve the medical use, possession, and sales of marijuana. The other two states are Louisiana and Alabama.
Mississippi's journey to cannabis decriminalization started in 2020 when its constituents voted for cannabis reforms; however, the measure was thrown out by the state's Supreme Court. This current measure got approved in January and was subsequently signed by the Governor in February.
To many, it came as a shock that Louisiana, Alabama, and Mississippi would be one of the first movers for cannabis legalization in the southern regions. To be honest, many industry giants never even thought that these traditionally conservative states would legalize cannabis unless it became federally decriminalized. It is obvious that these states were impressed by the economic yields a legal cannabis industry could generate for a state.
Excelling in Cannabis Cultivation
The South has what it takes to excel in cannabis cultivation. The region already has a proven track record with similarly regulated industries. For instance, the area produces one of the highest amounts of tobacco in the country. At least five of the top ten tobacco-producing states are in the Southern region.
Cannabis is an agricultural commodity that has to be cultivated, cured, and processed with expertise. With practice and the right strategies, the South could be a top producer of cannabis plants and products in no time. We've observed that most of the South's leading cash crops have recorded declines in pricing in recent years. Although these crops still bring in a sizable revenue to the states annually, cannabis has a higher potential to bring in higher returns.
The Southern States know their way around farming, production, and establishing regulated frameworks. These three skills alone can propel them into a productive cannabis economy. Another piece that's needed to complete the jigsaw is people. The cannabis industry is in its infant stage. Hence it might be difficult for most southern states to get the required workforce. However, there are students in well-known universities in southern states which can be introduced to different niches in the budding industry. The state can establish policies to encourage talents to remain in the region post-graduation.
Curbing the Increasing Brain-Drain in the Southern States
The United States Congress joint economics committee recently investigated the issue of talent gain and talent loss across all states. The committee confirmed that the southeastern region had experienced a massive brain drain in recent decades. A high percentage of highly educated residents often leave their home southern states for other states in search of better job opportunities and living conditions. This has resulted in a stagnant and eroded southern economy.
Alabama, Louisiana, and Mississippi have taken the first step to reverse this brain drain and talent loss in the region by legalizing cannabis. Operators in this emerging southern cannabis industry are racing to mold the industry's future and become the widely known household cannabis brand. Only one company can have the chance to create the Budweiser or Q-tip of cannabis in the south, and the current operators are working hard to clinch this opportunity.
In the following months and years, many bright minds from mainstream industries will be willing to dive into the southern cannabis industry because there is room for career growth and financial benefits.
What About Other Larger Southern States?
Aside from Alabama, Mississippi, and Louisiana, most constituents in other larger southern regions of the country, including Georgia, North Carolina, South Carolina, Kentucky, and Tennessee, are far from granting residents easy access to medical marijuana. Some areas in Arkansas, Florida, and West Virginia already have limited access to cannabis-derived medications—provided they meet the restrictive qualifying conditions.
If other states were to legalize cannabis soon, they would also strive to gain leadership in the region's cannabis economy. It would be a competition of who can establish the best policies.
We can expect these states to give tax incentives to cannabis businesses to improve the local economics. For example, companies in Georgia have enjoyed a steady stream of tax incentives. Although it is yet to approve a comprehensive cannabis legislature, its residents enjoy one of the most extensive film incentive programs in the country, even higher than New York and California. The higher a state's tax incentives, the higher the number of entrepreneurs trooping in to establish offices and operations.
Final Note
Southern states have all it takes to be a cannabis economic powerhouse. The region possesses the skills, fertile lands, brilliant minds, and immense potential to overthrow the current highest producers of cannabis in the country.
But first, they must approve cannabis reforms that decriminalize cannabis, grant clemency, and provide social equity to all. In all these, we believe that BIPOC must be considered for crucial roles in this emerging industry. Seeing as they're more likely to be charged for cannabis offenses than white people and are least often considered to head legal cannabis companies. As it is, the southern states shouldn't be the only region looking to pace a way of this current economic downturn. The country should also work on implementing a comprehensive strategy by ending cannabis prohibition.
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