The American cannabis industry could pump nearly US$80 billion on an annual basis into the nation’s economy by 2022, a staggering figure that highlights the true reach of the marijuana industry.
The following is an excerpt from Marijuana Business Daily by Eli McVey.
Read the original article here.
This data is particularly valuable to cannabis businesses looking to show the benefits of legalization to legislators and policymakers. That’s because it can help them understand the importance of the cannabis industry to the larger US economy – and how much more important it will become.
Estimates published in the newly released Marijuana Business Factbook show the total economic impact of legal cannabis sales increasing from $20 billion-$23 billion in 2017 to $63 billion-$77 billion by 2022 – a 223% increase.
By comparison, the $77 billion figure is similar to the 2017 gross domestic product of New Hampshire, which stands at $81 billion, according to the U.S. Bureau of Economic Analysis.
The estimates reflect the cannabis industry’s rapid transition out of the black market and into a mainstream economic juggernaut, generating thousands of new jobs, providing business opportunities and creating significant ripple effects across the country.
Based on sales of medical and recreational cannabis at the retail level – including flower, infused products and concentrates – the estimates use an economic multiplier of 3.5 to quantify the industry’s overall contribution to the economy, showing how revenue generated by cannabis businesses permeates through communities, cities, states and the nation.
In other words, for every $1 consumers/patients spend at dispensaries and rec stores, an additional $2.50 of economic value will be injected into the economy – much of it at the local level.
Following are examples of how cannabis businesses affect the economy:
Tourists visit rec states to purchase and consume cannabis, while cannabis business professionals travel for meetings, conferences and market research – infusing tourism dollars into a state.
The creation of cultivation sites, dispensaries/rec shops and infused product companies spurs real estate and construction activity. Many grows, for instance, occupy warehouse space that was previously vacant, while a fair share of retailers took over and renovated dilapidated storefronts.
Cannabis businesses collectively pay hundreds of millions of dollars in state and local taxes, which fund projects including roads and rural hospitals and government programs such as education.