In the midst of a global pandemic and economic downturn, legal cannabis is surfacing as a recession-proof industry. The economic impact of cannabis in the United States has increased state tax revenues and created more jobs. It has also impacted real estate prices and progressed social equity.
2021 was a big year for the U.S. cannabis industry. New Mexico, Connecticut, Virginia, and New York all legalized recreational marijuana, while Alabama legalized medical use.
Here are some insights into what happened in 2021 and what the industry anticipates in 2022.
Marijuana is taxed differently by each state. Washington currently holds the highest sales tax for cannabis at 37%. Washington was one of the first two states to legalize recreational cannabis. Colorado also legalized recreational use in 2012.
At the end of 2021, the Colorado Department of Revenue reported collecting over $423 million from sales throughout the year, compared to $387 million in 2020. Since retail shops opened in 2014, Colorado has surpassed $2 billion in tax and fee revenue.
As of December 2021, the Marijuana Policy Project reports that states reported a combined total of $10.4 billion in tax revenue for adult-use cannabis sales in 2021. Several states use these funds for:
- Public schools
- Health care initiatives
- Mental health programs
- Law enforcement
- Childcare services
- Environmental protection
- Public transportation
One report suggests that the federal legalization of marijuana has the potential to generate an additional $105.6 billion in aggregate federal tax income by 2025.
Marijuana Job Creation
According to the Leafly 2021 Jobs Report, legal cannabis now supports over 321,000 full-time American jobs. This is an increase of 77,300 (32%) over 2020. In an economy recovering from mandatory business closures and unemployment, cannabis employment rates continue to rise. Many positions in the legal cannabis industry pay more than the median U.S. salary.
A quick search of common job sites such as Linkedin or Indeed will pull up thousands of available positions in cannabis across the United States, demonstrating the far-reaching economic impact of the industry.
Some remote positions may even operate out of states that have not legalized marijuana. Popular careers include:
- Account and sales representatives
- Laboratory technicians
- Cannabis compliance specialists
- Marketing professionals
- Marijuana couriers
- Web developers
The 2021 MJBizFactbook predicts the marijuana industry will employ 545,000 to 600,000 people by 2025. Totals for 2021 have not been released, but early estimates speculated the industry would reach 340,000 to 415,000 full-time equivalent workers across the United States.
Real Estate Impacted By Cannabis
A mid-2021 report asserts that between April 2017 and April 2021, property values increased by $17,113 in states where recreational marijuana is legal. The report also correlates higher home values in cities with more dispensaries, suggesting an increase in job opportunities and economic growth.
The National Association of Realtors surveyed members and found a significant demand for commercial property in states where cannabis is legal, including warehouses, storefronts, and land. The 2021 survey also recorded a higher demand for commercial properties for marijuana businesses since the onset of the COVID-19 pandemic. Interestingly, 11% to 13% of members reported an increase, while 5% to 14% reported a decrease in commercial property values near dispensaries.
Cannabis Driven Social Equity
It is widely accepted that the war on drugs disproportionately affected minorities and people of color. Convictions for what would be considered minor offenses today resulted in harsh punishments. Several states made efforts in 2021 to help those affected overcome barriers to entry that may otherwise prevent them from starting their own cannabis business.
In mid-2021, the Massachusetts Social Equity Program (SEP) approved the release of cannabis delivery business license applications exclusively to companies with minority owners. This gave them an opportunity to establish their businesses in this new, progressive industry.
Following the lead of Massachusetts, Colorado implemented an “accelerator” program to assist individuals facing barriers to entry in the cannabis industry, including those arrested for a marijuana offense. Colorado Governor Jared Polis also granted pardons for 1,351 people convicted of possessing two ounces or less of marijuana.
The California Cannabis Equity Grants Program awarded $15 million to cities and counties as low- or no-interest loans. These municipalities are part of social equity programs.
Several other states have implemented their own social equity initiatives, and the trend is expected to continue in 2022.
Looking Ahead to the Future of Cannabis
The economic impact of cannabis in the United States in 2021 surpassed many expectations. Increased normalization of marijuana use and availability of research and education has helped the industry progress and establish that it is here to stay.
There are many possibilities for cannabis in 2022. Currently, 34 states have legalized marijuana in some capacity. Several others have legislation pending. Regulations for cannabis banking, such as the SAFE Banking Act, could change the landscape of the existing cash-only economy that is necessary for cannabis businesses.
Do You Own a Cannabis Business?
Cannabis compliance is key for all aspects of running a legal cannabis business. Each state has unique compliance requirements, and failing to meet these standards could result in license revocation.
With the prospect of federal legalization in 2022 looking unlikely, state regulations continue to be a moving target. If you own a cannabis business, get a free demo with Simplifya to see how you can stay compliant with tools and services designed specifically for your needs.