Economic Reasons to Legalise Weed 

Liz Filmer
09 May 2023

If you look at cannabis from a purely money-based standpoint, here are five good reasons why legalising it is attractive.

1. Raise Revenue for Governments 

Legalising cannabis could put a lot of money into the pockets government. Data released in a report in 2017 estimated that the immediate legalisation of cannabis at the federal level in the U.S. could raise $131.8 billion in aggregate federal tax revenue collected between 2017 and 2025.

The government could go from accumulating practically no revenue annually from cannabis apart from taxing corporate income for marijuana-based businesses to generating possibly $10 billion annually. 

2. Create Jobs

Legalising weed would also bring a substantial boom to the jobs market. Data estimates that the rapid legalisation of cannabis, and its stable growth through 2025, could lead to the accumulative creation of 1.1 million jobs. 

First, there would be an immediate demand for jobs directly interacting with the plant, such as farmers, processors, distributors, retailers and other businesses involved in the supply chain.

We would also see a significant lift in other businesses that cater to the cannabis industry, such as consulting firms, software developers, and finance services. This is not an exhaustive list; the move would create many new direct and indirect jobs.

3. Opportunities to Invest

Another reason to consider legalising cannabis is that it could be desirable to investors. Investors cannot exploit its massive growth potential as long as it remains illegal. If cannabis were legal, stocks would be free to list on reputable U.S. exchanges, improving their liquidity and beefing up reporting standards. But, more important, it would allow investors to cash in on double-digit growth rates for the foreseeable future.

4. Lower Law-enforcement Costs

 In 2013, an American Civil Liberties Union report found that federal cannabis enforcement costs approximately $3.6 billion annually. If cannabis were legalised, then these costs would drop dramatically.

Additionally, removing cannabis from the controlled substances list would mean fewer court cases, fewer incarcerations, and a lot of saved money. 

5. Reduction in Prices

Lastly, legalising marijuana in the U.S. would likely lower weed prices.

While lower cannabis prices wouldn't be good news for stocks or the federal government, it could benefit medical patients. Those using cannabis, CBD, and other products would probably find their medicines considerably more affordable if pot were legal.

Are these economic reasons enough to convince lawmakers to consider legalising cannabis? Only time will tell.

Liz Filmer