As of 2013 marijuana accounted for twenty-one percent of drug trafficking offenses, more often than not by Mexican cartels that according to the DEA are the “greatest criminal threat to the U.S.” A general misconception people have about recreational marijuana is that the only people using it are teenagers and college kids getting high, and view it in a negative light. When in reality the use of marijuana in America is widespread and not limited to a singular demographic. Another misconception is that any usage of marijuana is detrimental to one’s health. While there is little to backup these claims, there are studies that show it has been beneficial to some people’s battling illnesses. The recreational use of cannabis is an economic gold mine of an industry. Marijuana was first outlawed in 1937, and it wasn’t until the mid 90’s that baby steps of progress were being made. Then when the DEA raided a compound of terminally ill users, the movement broke into a sprint. Today usage of cannabis is widespread throughout the country, and is currently legal for medicinal usage in twenty-two states, and for recreational use in seven states. Research show that it could have one of the fastest growth rates of any industry in the past twenty-five years. Countless people would care about this because as it would affect the daily lives of those who started grow businesses in addition to the people who would be investing in them. The marijuana industry has the fastest growth rate of any industry in the country. From an economic standpoint, marijuana can be compared to the television or the internet. In the short time marijuana has been legalized for recreational use in certain states, the industry has shown trends that surpass the TV and internet in the same time frame. This is a huge investment opportunity for anyone in the business world to make millions. It would be economically beneficial for all remaining states to legalize marijuana for recreational use. Recreational marijuana has the potential to create a multi-billion-dollar industry nationwide, while re-vitalizing a number of other industries. By examining states that currently have recreational marijuana, how they got there, and how they are benefiting from it, it can be shown how individual states and the national economy would benefit from widespread legalization.

Marijuana was first made illegal on a federal level in 1937 when the United States government passed the Marijuana Tax Act (MTA). This act, with exclusion of medicinal and industrial uses, made the possession and transfer of marijuana illegal throughout the fifty states. It also imposed a tax on the cultivation of hemp. In 1969 the U.S. Supreme Court found this act to be unconstitutional on the grounds that it infringed on one’s fifth amendment right, in order to sell hemp a farmer would have to incriminate themselves and admit to growing marijuana to sell hemp. The MTA was repealed and the Controlled Substance Act (CSA) in 1970 which classified marijuana as a schedule I drug along with heroin and LSD. This  all changed one morning in 2002 the DEA raided a small marijuana farm in the mountains of California, setting forth a series of events and movement that no one could have predicted. The raid is detailed in Weed Land: Inside America’s Marijuana Epicenter and How Pot Went Legit a book written by Peter Hecht about the rise of medicinal marijuana in California. He opens the book with a chapter about the Wo/Men’s Alliance for Medicinal Marijuana “A terraced marijuana garden – a medicinal and spiritual refuge for the sick and dying” (Hecht 1). The group worked together to grow marijuana to be used by terminal patients to make the rest of their days easier. As the group’s founder, Mike Corral, awoke and looked out his windows he saw DEA agents swarming his home, and heard them breach the front door.

 ““I’m not violent. This is medical marijuana” he hollered “I’ve got a phone in my hand. I’m not going to resist” Shirtless and wearing sweatpants, he started down the stairs and was hit immediately with blinding floodlights. Agents grabbed him, forced him facedown at the base of the stairs, and cuffed him” (Hecht 2). 

They forcefully arrested a peaceful man making no attempt to escape. The DEA agents started cutting down the plants, so large they needed chainsaws, all the while members of WAMM started a civil movement right outside the gate “a federal raid would inspire unprecedented compassion and acceptance for medicinal cannabis in California” (Hecht 7). These protests in Los Angeles continued for months with protests in front of government offices. They would hold “smoke outs” where protestors would smoke marijuana in large groups to show their support for the movement. Legislation was petitioned that would allow for groups like the Wo/Men’s Alliance to exist, for the benefit of with life threating illness. In the following year California began to alter its stance on the legality of cannabis. It passed legislation for the creation of marijuana coalitions. While the sale of marijuana was still illegal, these coalitions functioned as a kind of phantom business in Los Angeles. Additional laws were passed that only allowed people with diagnosed medical conditions to receive marijuana from these coalitions, an early form of medical marijuana. Since it was so new, it was not hard to convince a doctor ones condition could be treated with marijuana. The California law stated that when receiving marijuana from a coalition, the coalition would be able to request reimbursement for time and resources used cultivating the cannabis. That is the basic model of a business. A business manufactures goods or services that they then sell, or in the case of California marijuana request reimbursement, for what they valued their supplies and time to be worth. California in affect legalized marijuana in Los Angeles for a short period of time. Over the course of the next three years so many of this coalition shops had opened in Los Angeles that legislators began to fear that marijuana would over-run the city and hurt the public image. The city government began forcing coalitions out of the city until only a few remained. This early attempt at medical marijuana was all sparked by a single DEA raid on small farm where terminally ill patients were growing marijuana.

On November 6th, 2012, Colorado citizens voted to approve Colorado Amendment 64, the legalization of recreational marijuana. They became the first to do so and have since become the epi-center of the marijuana and marijuana paraphernalia in the United States. In the past 5 years it has become a multi-billion-dollar industry, generating $2.4 billion in economic activity within Colorado. Of the $2.4 billion $1 billion was a direct revenue of the industry, and the other $1.4 billion was spilled-over in to together areas of the economy. Also in 2015 the industry created over 18,000 jobs in the state alone (Pyke). In addition it also indirectly impacted local demands of other industries, such as the energy powering the sophisticated lighting systems within the grow houses, and the water companies supplying the water for irrigation. In an article written by Debra Borchardt, which was published to Forbes online publication, she writes about the growth of the cannabis industry in 2016 compared to how it performed in 2015. In 2015 alone marijuana produced 125 million dollars in tax revenue for the government, while at the same time decreasing the required police spending to fight illegal marijuana. She shows the industry’s growth through data provided by a company called BDP Analytics that analyzed the sales and revenue of Colorado’s market, as well as quotes from industry leaders. In 2016 marijuana sales in Colorado were recorded at 6.9 billion dollars, a massive increase from 2015. Borchardt’s article is factually accurate, providing exact details regarding the year-to-year growth of the cannabis industry. She also provides data from three different sources. The first is ArcView Market Research which shows the growth of the north American market (United States plus Canada) has grown by a staggering 30% in 2016. Borchardt then quotes ArcView’s editor-in-chief, Tom Adams, who says the last industries to have this type of growth were cable television and broadband internet. This comparison is not to say that marijuana will replace television or the internet, but rather that it is experiencing similar growth. Another point to notice is that industry growth does not take into account size, only the change in size. Borchardt finishes her article by writing about the possible difficulties the industry might face with the new federal government. The Trump administration it-self has not taken a stance for or against recreational marijuana, but his recent appointment for attorney general had vocalized his distaste for the industry since cannabis is still federally illegal, the new anti-marijuana attorney general could shut down any marijuana dispensary that he felt necessary even if they were not violating any state laws. 

By looking at the data growth of the marijuana industry in the state of Colorado it is shown that the project rate of growth over the next five years is twenty-five percent per year. This percentage is calculated by comparing the revenue created by the industry each year of the past years. By looking at these percentages a trend is possible to make a prediction of how it will continue. As mentioned previously there have been two industries’ that have shown the same amount of growth per year that marijuana has. In the 1990’s cable television was growing at a rate of nineteen percent per year, while in the 2000’s broadband internet was on the rise by a twenty-nine percent a year. As of 9:50 PM on March 15th, 2017, the United States population was 324,695,535. According to the US Census in 2015 ninety-eight percent of households in the United States have cable television and seventy-five percent have broadband internet. Taking that percentage of the population out of the current population of 324,695,535, this shows that 280,861,638 American citizens have access to and use one of these services/products. It has taken cable television twenty-seven years, and broadband internet seventeen years to achieve this widespread usage. Provided that states continue to legalize marijuana for recreational use, the industry has the potential to continue on this path of growth. 

Today there are twenty-two states that have legalized marijuana for medical use. Meaning patients with a wide variety of medical health problems, from physical conditions like cancer or Bulimia to mental disorders such as Alzheimer’s or PTSD, can be prescribed marijuana by a doctor, making it legal for them to possess and use marijuana. As of the 2016 elections seven states and the district of Columbia have legalized marijuana for recreational use. Of these seven states, four and Washington D.C just legalized marijuana in November. One in five Americans now live in a state where marijuana is legal for recreational use. Some of the states like Massachusetts have a tiered approach to the legalization, as of December it became legal for citizens over twenty-one to possess and grow marijuana but not sell. Recreational marijuana dispensaries are not permitted to open until 2018, giving the state time to pass legislature that will outline how the industry will be regulated in Massachusetts, as well as how the cultivation and sale will be taxed. One state that is unclear is Maine, which voted to legalize last November. The issue the state is facing is that their governor, Paul LePage, is strongly anti-marijuana, and has openly questioned the count of the vote in November, as the margin of victory of the proposed bill was only 4,073 votes, the Census recorded Maine’s voting population to be 1,071,112. The law that will legalize marijuana cannot take effect until the governor signs it, but there is also no law that can force him to sign it. Since he has simply done nothing about it, instead of vetoing the law, the state congress cannot vote to override his veto as it doesn’t exist yet. The state of Maine is forced to play this waiting game with LePage, who’s term as governor will end in 2018, but there is news that the governor is expected to sign off within the coming weeks. California is set to become the wild west of the marijuana industry and is predicted to surpass Colorado, with Los Angeles taking the title of the capital of marijuana from Denver. There are little to no regulations planned for who may grow and sell marijuana in the state, the industry is expected to include everything from sprawling fields supplying major market retailer to backyard growers selling at roadside stands. This differs from Massachusetts where a household is limited to eight marijuana plants and cannot sell them. California is expecting to have roughly 25,000 cultivators register to distribute and will begin to pay taxes. The state also currently has 1,700 operating dispensaries for medicinal marijuana, which will convert to recreational in 2018. California Proposition 64, the bill that legalized marijuana in the state, stated that recreational dispensaries would not open until 2018. This is using the same model that Massachusetts has set in-place, people over 21 may now possess marijuana but still need to have a medical card in order to purchase from a dispensary. The last two states who legalized marijuana this past election season were Nevada and Alaska, and both have created peculiar paths to legalization. Nevada previously legalized marijuana for medicinal use, and even after the recreational legalization one is still required to have medical card in order to purchase at the dispensaries. The state government is working to provide temporary permits to medical dispensaries to sell certain products for recreational use to non-medical customers, that is projected to first occur in late June of 2017. Nevada residents that do not live in with twenty-five miles of a dispensary will be allowed to grow their own plants on private property, limited to six per individual and a maximum of twelve per residence (Jensen). A law that Alaska and Nevada share is that the use of marijuana must be on private property. It is strictly against the law to use in public. All the states are planning on using a fifteen percent excise tax on marijuana and marijuana products. 

On a national scale, the legalization of marijuana is a smart move for the nation’s economy. As stated above the marijuana industry generated 2.4 billion dollars of economic activity (different than gross revenue) and 125 million in tax revenue in Colorado, the nation’s foremost leader in recreational marijuana. Colorado currently has a population of roughly five million people, which is 1.53% of the United states population. With rough math it can be determined that by using Colorado and its market system and tax revenue that nationwide there is the potential for the marijuana industry to create 156 billion dollars of economic activity and roughly 8.16 billion in total state government tax revenue, would vary depending on the tax thresholds of each state. If the Federal government were to legalize it nationwide it would then be able to put a federal tax on the product to increase tax revenue. Another key aspect of federal legalization is that the government spending to combat the black market marijuana trade would be virtually non-existent (Goltz). In the year 2013 the United States government reported spending roughly twenty billion dollars in man-power, resources, and time working against the illegal marijuana market. If the government were to legalize marijuana it would cut nationwide police and agency spending by twenty billion, while receiving eight billion in tax revenue. As a result of legalization illegal marijuana will decline, destroying business for gangs and cartels, making cities and neighborhoods safer (Gieringer). That creates a positive net change of twenty-eight billion dollars for the government, not counting revenue created by other industries that will serve the marijuana industry’s growth. The industry doesn’t just have the potential to create revenue, it can create jobs. As mentioned above it created 18,000 jobs in Colorado. According to the US Census the unemployment rate as of March 2017was 4.5% with 7,202,000 citizens unemployed. With the jobs it created in Colorado as a base measure, the industry has the potential to create roughly one million full time jobs around the country, which would reduce the employment rate by fourteen percent. This clearly shows that over time the industry can help reduce the national unemployment rate. 

Times are changing, nine months ago recreational marijuana was legal it three states. Today it is legal in seven and Washington D.C., the national view of marijuana is changing. There are currently twenty-eight states where marijuana is legal for medical use, and more of them will vote to legalize for recreational use in the next round of voting. The federal government should realize the direction that the country is moving in and change itself to be in a position to capitalize on that movement. It has the potential to create government tax revenue, boost other industries, create jobs, and decrease government spending. Each state that recently legalized marijuana has taken aspects of the systems that other states have already out in place and proven that they work. 
