How Marijuana Could Impact the U.S. Economy
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If the U.S. federal government could just get out of the way, marijuana could put a real dent in our suffering economy. It is challenging to stay current on the U.S. fluctuating deficit, or to trust calculations, but the 2018 deficit is currently $440 billion.
Projecting how much revenue the United States could generate if we legalized marijuana nationwide is not too difficult based on current demand and business tax rates. Alone, the marijuana industry would not turn around the entire economy but it certainly could help.
The analysis shows that if marijuana were fully legal in all 50 states, it would create at least a combined $131.8 billion in in federal tax revenue between 2017 and 2025. That is based on an estimated 15 percent retail sales tax, payroll tax deductions and business tax revenue.
The federal government would reap $51.7 billion in sales tax from a legal marijuana market between 2017 and 2025, entirely new revenue for a business that remains illegal — and unable to be taxed — federally.
The business tax rate for the study was calculated at 35 percent. The corporate tax rate was lowered to 21 percent in a sweeping tax bill President Trump signed last month.
“If cannabis businesses were legalized tomorrow and taxed as normal businesses with a standard 35 percent tax rate, cannabis businesses would infuse the U.S. economy with an additional $12.6 billion this year,” said Giadha Aguirre De Carcer, the CEO of New Frontier.
The study also calculates that there would be 782,000 additional jobs nationwide if cannabis were legalized today, a number that would increase to 1.1 million by 2025. That includes workers at all ends of the marijuana supply chain, from farmers to transporters to sellers.
The money being generated from marijuana sales in Colorado and Nevada are staggering and certainly a sign of how the U.S. could benefit from cannabis legalization. Are financial projections like these worthwhile?
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