The Marijuana Economy – Good for Everyone?


Marijuana Money

Economics is always a tricky subject. When we’re talking about the economic implications of marijuana legalization, things get even trickier. There’s no doubt that states who have legalized marijuana are making money. But who is benefiting from all of that new cash flow? Who gets access to those lucrative new business opportunities?

Cannabis Legalization – Profitable for the State

It’s hard to deny that states who have legalized cannabis are raking in the cash. Just look at California, the first state to legalize marijuana over 20 years ago. Currently, the state sees over $2.75 billion in marijuana sales. But its northern neighbor, Washington, is even more impressive. Though it’s population is a fraction of California, the state still manages to bring in over $1 billion in combined recreational and medical marijuana sales.

But it’s not just states with full legalization who benefit. Michigan pulls in $633 million from medical marijuana sales. Rhode Island pulls in $60.2 million. And Florida makes over $17.4 million from its medical cannabis sales. Here in Louisiana, it’s estimated that the revenue from chronic pain sufferers alone could be as much as $4.7 million. But who is making that money?

Legalization – A Job Creator

In almost every state that has legalized marijuana, the sales and tax revenue has far exceeded the initial estimates. And legal marijuana creates jobs – lots of jobs. According to the Drug Policy Alliance (DPA), there are as many as 230,000 employed in the legal marijuana industry. This number is expected to continue growing as more states legalize cannabis, and as the industry continues to grow in states where it is already legal.

Marijuana creates jobs in two ways: directly and indirectly. Direct employment means working in a marijuana business: a dispensary, growing operation, store, or manufacturing operation. The DPA reported that in Colorado, 12,591 full-time jobs were directly created by the marijuana industry. But indirect employment abounds as well. More than 5,000 jobs were created in related industries like security, legal services, and consulting firms. Washington had similar results, with nearly 11,000 people employed by the marijuana industry, and in Oregon, there were 12,500 jobs directly associated with the marijuana industry.

But even legalized marijuana isn’t always equitable.

The Racial Side of the Marijuana Industry

It’s no secret that the black community is overrepresented in Louisiana’s for-profit prisons. Though black adults make up only 30.6% of the state’s population, they comprise 67.5% of Louisiana’s prison population. In addition, black people are nearly three times more likely to be arrested for marijuana possession – in spite of the fact that white people possess and use marijuana just as often.

It’s natural to assume that the legalization of cannabis leads to massive economic opportunities. Marijuana farms, dispensaries, eateries, and more are all waiting to be established and staffed. But are those opportunities accessible to everyone? Maybe not.

According to a study by national nonprofit Prosperity Now, in New Orleans, the median income for black families is $25,806 – compared to a median income of $64,377 for white families. Black families are six times more likely to be living in poverty than white households. In addition, black workers in the city are three times more likely to be unemployed.

This could mean that those many business opportunities opened by marijuana legalization could be inaccessible to those who most need it, and those who have been most disproportionately affected by cannabis prohibition. The fees for starting a business are often quite expensive. In the case of a marijuana business, they can be even more so. For example, a study by UC Berkeley found that applying for a retail license to sell marijuana could cost up to $1 million. While the cost in Louisiana isn’t likely to be that high, it is still likely to be prohibitively expensive.

There are other barriers as well. Many of those who are in prison for marijuana-related crimes have been found guilty of a felony. If cannabis is legalized, will that felony charge be erased from their record when they are released from prison? If not, they could still find it difficult to get a job – even in the marijuana industry. Both business licensing and bonding are affected by a felony charge. And even having an arrest record can make it more difficult to get a business loan.

According to Marijuana Business Daily, 81% of marijuana business owners are white. This leaves minorities once again grossly underrepresented.

Making Legalized Marijuana Equitable

There are ways to ensure that cannabis legalization remains equitable. For example, in Massachusetts, a portion of the tax revenue raised from marijuana sales is put into low-income communities that have been disproportionately impacted by uneven law enforcement activity. However, this doesn’t solve the problem of being wealthy enough to start a business.

Some cities have also created programs to promote social equity in the marijuana industry, helping veterans, minorities, and women enter the market. These programs pay the taxes and licensing fees, as well as offering free or low-cost education for how to start and run a business, making it easier for these groups to get started.

Another idea that is gaining in popularity is requiring states to prioritize giving licenses to those who have been convicted of marijuana-related crimes. Since that population is disproportionately black, it would apply to black marijuana entrepreneurs more often, acting as a form of reparations.

Whatever the solution to the socioeconomic conundrum is, one thing is clear: the good brought on by legalization still outweighs the bad when it comes to marijuana legalization.

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