Legal marijuana presents the potential for enormous benefits for economies on a local and national scale. It could also help secure investors' investment portfolios across the country and elsewhere as well. While marijuana remains illegal at the federal level, it is difficult for investors to capitalize on the growth of the industry. The number of marijuana-related companies listed on public stock exchanges is minuscule, and while investors have the option of working with over-the-counter exchanges, many of the most successful businesses in the initial cannabis legal space are based in Canada or other countries.
However, prohibition does reduce drug use. The World Bank estimates that cocaine use would double if it were legalized in the United States. Drugs can be dangerous and highly addictive, and there is concern that drug legalization will lead to a major public health crisis, but that is not necessarily the case. Arguably, the real drug crisis in the United States revolves around legal and prescription drugs.
For example, cocaine is usually not addictive and consumers tend to be price sensitive. That means taxing cocaine can be an effective deterrent. Regulation can also ensure quality and that drug users get the product they want. Nobel Prize-winning economist Gary Becker speculates that drug prohibition increases addiction because it makes users reluctant to seek treatment.
The ICF study estimates that there are at least 81,000 additional direct, indirect and induced jobs in California as a result of the legalization of marijuana sales. All of these reasons combine to lower the likelihood that marijuana will become legal nationwide at any time. Overall, legal marijuana could mean a big boost to state economies and a lot of money for both state and federal governments. In total, more and more states are taking steps to legalize marijuana (whether for medical or recreational use, or both).
The economic benefits of legalizing marijuana were already evident when the first states changed their legal positions. Even if the best thing for them is to legalize the drug trade, developing countries cannot legalize production without the cooperation of the advanced economies that make up most of their market. As marijuana becomes legal in more and more parts of the country, the price is likely to fall overall as a result of commodification. Legal changes have generated a flourishing industry of legal cannabis companies, including those that aim to research and develop medical products based on cannabis, those working to distribute and grow marijuana, and many others.
Taking a sheet from the Colorado or Washington book, four states in New Jersey, South Dakota, Montana and Arizona approved measures to legalize the use of marijuana for recreational purposes.
