The medical and recreational cannabis industries continue to have an increasing impact on the national economy, but the effects on individual states vary depending on the size, maturity, and kind of each market. Additionally, some smaller, less populous states are producing greater economic impact per person while highly populated states with broader marketplaces have a larger dollar amount of impact.
According to statistics from the recently released Tomorrow420 report, the entire economic impact of cannabis sales in the United States is anticipated to exceed $100 billion in 2023, an increase of more than 12% from the previous year.
The economic impact from cannabis sales might equal to $17.7 billion pushed into the state’s economy in 2023 for California, which is by far the largest cannabis market in the US in terms of sales and population. In comparison, marijuana makes a considerably smaller but nevertheless considerable contribution to the sparsely populated recreational and medical markets. By the end of the year, Mississippi, which began selling marijuana in January, might see a $30 million increase.
Cannabis’s economic effects by state
The cannabis sector has a significant and expanding impact on the overall U.S. economy, affecting everything from jobs to taxation to real estate. This chart is based on anticipated medical and/or recreational sales for 2023.
Some people profit more than others if the state’s entire population is taken into account.
The marijuana market in California may have the most overall impact, but other states offer more per person.
For instance, Alaska will generate an average economic impact of $1,431 per person this year.
Additionally, the legalization of marijuana in Colorado, Massachusetts, Michigan, Montana, Nevada, and New Mexico will bring in nearly $800 for each inhabitant of those states.
Working in the cannabis industry gives employees money to spend on daily basics including food, lodging, transportation, entertainment, and more.
Additionally, cannabis businesses, customers, and patients shell out hundreds of millions of dollars in state and local taxes, which go toward financing infrastructure projects like roads and schools.
The expansion of existing firms and the influx of retail, manufacturing, and agricultural businesses strengthen state real estate markets by raising overall demand for commercial buildings.
Large investments in technology and equipment may be necessary for marijuana cultivation, which will benefit not just the local economy but also many regions across the country.
The list continues.
These estimates are a best guess because to the peculiar nature of the marijuana economy, which includes ancillary industries like lighting supplies and legal services along with production, manufacture, and retail. The supply-chain revenues that are sometimes used to calculate the “total size” of an industry are not the same as the economic effect of the marijuana industry.
Instead, the economic multiplier shows how the industry affects the overall economy. In this scenario, the economy will receive an additional $2 injection for every $1 customers and patients spend at retail establishments, a large portion of it locally.
The same common multiplier of 2 can also provide information about the local-dollar effects of sales of marijuana for recreational and/or medical use. It’s true that the multiplier method isn’t ideal for local effect studies.
The amount of money that marijuana sales provide to the economy can be significantly increased or decreased depending on state laws, taxes, and other market factors. The estimations provide us a solid idea of how the industry is impacting the overall economic situation, even though it may be challenging to account for such discrepancies.