Pot-enomics: The birth of the legal weed industry
Here’s a look at the financial costs and benefits of decriminalizing the drug.
These are high times in America for recreational marijuana users. On Tuesday night, two states – Colorado and Washington – passed historic measures to legalize using and selling small amounts of pot, effectively challenging the federal law that classifies the drug as an illegal narcotic.
In Colorado, adults 21 and older will now be able to legally buy and possess up to one ounce of cannabis and grow as many as six plants. In Washington, the measure authorized the state liquor control board to regulate and tax the drug.
“The voters have spoken and we have to respect their will,” said Colorado Governor and Democrat John Hickenlooper, who opposed the measure, in a statement. “This will be a complicated process, but we intend to follow through.”
A medical marijuana measure, which would legalize the practice for medicinal purposes only, also passed in Massachusetts. Including it, 18 states plus Washington, D.C., now have laws allowing the use of medical marijuana in some form.
While it may take some time for the remainder of the country to follow suit, there has been much debate over the costs and benefits of legalizing the drug. With state coffers running low, some wonder if it makes sense economically to flip arrests, fines and expensive incarceration into jobs, tax revenue and small businesses.
Either way, here’s a look at the numbers:
• 750,000 – The approximate number of people who are arrested every year in the U.S. for marijuana-related offenses. About 40,000 inmates of state and federal prison have a current conviction involving marijuana, most having to do with distribution.
• $14 billion – The estimated size of the marijuana market if it were to be legalized in the U.S., according to the 2010 Cato Institute paper The Budgetary Implications of Drug Prohibition, which could yield some $8.7 billion in tax revenues and enforcement cost savings.
• 1,000 – The approximate number of dispensaries California’s medical marijuana industry has created, with some generating sales of more than $3 million a year.
• $105 million – The amount that California’s medical marijuana industry generates in taxes each year.
• $40 – The price of an eighth of an ounce of cannabis in Humboldt County, California.
• $10-$20 – The hourly wage someone can make “budtending,” i.e., standing behind the counter at a dispensary to greet and help customers with their purchases. Other jobs available in the industry include receptionists, doctors, delivery drivers, trimmers, growers, chefs, and managers.
• $5,000 – The fee to obtain a Medical Marijuana Infused Products Manufacturing License in Denver, Colorado.
• $8-$10 – A one-cup container of pot-infused ice cream from the Mile High shop in Denver, Colorado, featuring such flavors as Vanilla Bud, Brown Sugar Cinnamon Pot Tart, and High Country Chocolate.
• $400,000 – The expected annual profits of a small 224-plant growing operation in the basement of a licensed marijuana grower in Colorado.
• $150 million – The estimated revenues of the medical marijuana industry in just manufacturing and equipment spending in 2010.
• $18.95 – The price of a paperback copy of Aunt Sandy’s Medical Marijuana Cookbook: Comfort Food for Mind and Body. Included are recipes for lemon bars, turkey with stuffing, buffalo wings, tomato bisque, chicken curry, and many more.
• $100 – The maximum fine in New York State for a first-time charge of possessing less than 25 grams of weed.
• $5,000 – The maximum fine for selling 25 grams to 4 ounces of pot in New York State. This is considered a felony and can result in up to 4 years in prison.
• $240,304 – Cost of 4 years of incarceration in a New York State prison ($60,076 a year).
• 82 percent – The proportion of the 50,000 people arrested in New York for small amounts of marijuana in 2011 who were black or Latino.
Blaire Briody is the Life+Money Editor at The Fiscal Times. Subscribe to The Fiscal Times' FREE newsletter.
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It's really about time to get real, grow up and become more tolerant towards people who are of no harm to other citizens. I could not be more happy unless I was there to prove this magnificent act myself. I hope to see this happen in Finland as well.
There`s a lot of people you wouldn`t suspect of being in the weed business.Every
time I see people withdrawing $5,000 from the bank I know what it`s for.
The TAX REVENUE from LEGALIZED MARIJUANA is unbelieveable ! ! ! If it was legalized nationally throughout the United States. Just think what $ 1 4 , 0 0 0 , 0 0 0 , 0 0 0 . 0 0 could buy. The Republican Party could use this money to start a new Military Weapon System ! ! ! Even with the old Bushes "Trickle Down Economics" even the poor Americans may even receive a small portion of this in Food Stamps. Or in Republican states....the Food Stamp program could stay in place.
What a deal. It is truely a WIN ---WIN situation for everyone ! ! !
The TAX REVENUE from LEGALIZED MARIJUANA is unbelieveable ! ! ! If it was legalized nationally throughout the United States. Just think what $ 1 4 , 0 0 0 , 0 0 0 , 0 0 0 . 0 0 could buy. The Republican Party could use this money to start a new Military Weapon System ! ! ! Even with the old Bushes "Trickle Down Economics" even the poor Americans may even receive a small portion of this in Food Stamps.
What a deal. It is truely a WIN ---WIN situation for everyone ! ! !
Just think of what $ 1 4 , 0 0 0 , 0 0 0 , 0 0 0 . 0 0 = that's = $14 BILLION DOLLARS in TAX REVENUE if just MARIJUANA was LEGALIZED NATIONALLY each and EVERY YEAR ! ! ! ! Just think of the weapon systems $14,000,000,000 billion dollars could BUY each and every year - if it was LEGALIZED NATIONALLY ! ! ! ! And, just think......if America was to use....the Bushes "Trickle Down Economics" even the poor might get some of this great TAX REVENUE for Food Stamps.
This is a WIN-----WIN situation ! ! ! !
It's only a matter of time. Once the other states see the amount of taxes Wash & CO are taking in from Pot Sales then soon all 57 States will want to legalize Pot, right Obama?
Just look at Gambling how it has grown.
Next is Prosititution. It thrives anyway, why not make it legal and tax it.
We already have the whole Gay angle covered they just haven't figured out how to tax it, yet!.
Heck we could go way past Amsterdam. We could be a regular old Sodom and Gomorah.
What will God think? Do you think these Sunamies, Hurricanes, Floods and Fires might be a warning? Science aside, God can play rough.
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