Marijuana Legalization Is a Multi-Billion Dollar Revolution That's Sweeping Across the USA
In November 2013, the Denver Post’s news director, Kevin Dale, said that the marijuana legalization movement would be his newspaper's "biggest story" in 2014, not the Olympic games (of which Colorado had many athletes participating in), not the 2014 midterm elections and not any breaking news event. The hottest story in 2014 would be weed in America.
And he was right.
In the mere two and a half months since legalization went into effect, marijuana in Colorado has left the rest of the world in awe. On the first day of sales, the drug made $1 million. According to a budget proposal by Colorado Gov. John Hickenlooper, the state is expecting roughly $1 billion in sales for the rest of the fiscal year, generating roughly $100 million in revenue for the state. The money is slated to be used to build new schools.
Marijuana-related arrests — which make up 50% of all drug-related crimes — have plummeted in Colorado, freeing up law enforcement to focus on other criminal activity. By removing marijuana penalties, the state saved somewhere between $12 million and $40 million in 2012, according to the Colorado Center on Law and Policy.
"This is going to be one of the great social experiments of the 21st century," Hickenlooper said. So far, Colorado's gamble is paying off.
See above: The interactive map highlights where every state stands on marijuana legalization today.
Washington State will start retail marijuana sales in June. It's expected that the state will achieve the same level of monetary success that Colorado has. Budget estimates project that legal weed sales will bring the state nearly $190 million in taxes for the four years beginning in the middle of 2015.
Other U.S. states are eyeing Colorado's experiment and planning their own. Alaska, Oregon and California could have their say on legalization this year. Other states, including New York, Florida, Kentucky, Tennessee and Arizona are toying with the idea. The New Hampshire State House legalized marijuana in January, though the governor promptly vetoed that deal.
Critics of legalization are beginning to show signs of support. President Obama, Attorney General Eric Holder, former Republican presidential nominee John McCain and even Roger Goodell, the head of the NFL, have all been open to the great experiment. However, they have yet to make public comments of approval outright.
The great experiment is going global. From Africa to Europe and South America, other countries are looking at the U.S. marijuana experiment and designing new laws of their own. The great experiment that started in Colorado looks like it is turning into an all-out green revolution. The marijuana tidal wave is upon us.
There is some real cash to be made here. Keeping pot illegal is possibly keeping billions of dollars out of the economies in the most rural parts of the U.S., preventing these regions from banking on America's "biggest" cash crop.
Just how much money are we talking about? Estimates point to over $100 billion, easily dwarfing America's current top two biggest cash crops.
We've seen the economic power of legal pot. On January 1, when recreational weed became legally available to Colorado consumers, 24 pot shop owners across the state believe they collectively made more than $1 million in a single day of business. Residents can currently purchase up to an ounce of marijuana at one time for recreational purposes. Non-residents can purchase up to a quarter ounce. State officials expect up to $578 million in first-year sales revenue, as well as $67 million in tax revenue, which will be used to build schools and fund regulatory efforts.
But how much could marijuana sales add up to if legalization went national? There are a variety of estimates, but when you put them all together, it's a range of $10 billion to over $120 billion per year.
The map above, which illustrates the complexities of the marijuana marketplace, is one of the first of its kind. It focuses mainly on retail price of marijuana, based on user-generated reports from the Price of Weed website over the period of a few years. It was compiled by the Floating Sheep blog. Darker areas indicate where marijuana is the cheapest, and lighter spots indicate where marijuana is more expensive.
Weed would be the biggest cash crop. For comparison, the market for brewed beverages (like beer) in the U.S. is a little over $100 billion. Some studies claim marijuana is the biggest cash crop in America easily exceeding the combined value of corn ($23.3 billion) and wheat ($7.5 billion). Wowza.
Some states would see a massive payday. The map points to some massively interesting trends. Cost rises moving east from the Pacific Coast, with Oregon having the lowest prices. There are also pockets of maximum affordability around production areas, notably in Northern California, Eastern Kentucky and Western Tennessee. Price also varies based on your city, with the cost generally rising with the size of the city.
The map confirms other research. Kentucky, for instance, is reported to be a major center of marijuana production in the U.S. More so, it paints a picture of a complex marketplace that has failed to be fully tapped.
Just think how much money Kentucky, Tennessee and California are missing out on.
It makes more economic sense to accept it than to fight it. Police made a marijuana-related arrest every 42 seconds in the U.S. in 2012. Here's what that looks like hourly:
If you're staring at these stark numbers and wondering why the government even bothers, you're not alone. Public opinion has never been more in favor of decriminalizing possession of small amounts of pot. An October 2013 Gallup poll found that 58% of adults favored legalizing marijuana for adult use.
Most Americans believe marijuana shouldn't see such a dramatic crackdown. Since the mid-1990s, marijuana legalization has received outspoken support from within the medical community and more recently by the business community. Among the general public, support for legalization has slowly outgrown opposition.
In 2013, 52% thought that marijuana should be legalized with 45% opposed. According to Pew, this is an 11-point jump from 2010, when 45% thought it should be legalized and 50% opposed. The year 2010 was when Proposition 19, which would have legalized marijuana in California, was defeated with only a 53% majority. And of course, this is a dramatic swing from 1969, when nearly eight out of 10 Americans were opposed to legalization.
Remember that Colorado saved upwards of $40 million when it stopped cracking down on marijuana crime. Imagine what could happen across the rest of the U.S.
Colorado is setting the tone across the world. The green wave isn't just limited to the U.S. There is an ongoing, historic and unprecedented sea change happening across the world. As the evolving international consensus about the prohibition of marijuana becomes more clear, more countries are examing the American model.
What has been done in Colorado can be done at scale in other countries. The state's successful policy experiment and the resulting market boom have turned eyes toward the profit margins that legal weed made possible, as PolicyMic reported.
Canada, for its part, is transitioning from small-scale medical marijuana production to a $1.3 billion market composed of large-scale, government-certified indoor farms. Mexico City is considering both decriminalization of the drug and legalization of growing clubs.
Elsewhere, countries as disparate as China, Kazakhstan and Zimbabwe are considering loosening restrictions in order to export and cash in on the crop. Lebanon is permitting cannabis fields to grow as it turns its attention to more pressing concerns. Afghanistan continues to lead the world in exporting not just opium, but hashish as well.
In Europe, loosened regulations are coming in the form of decriminalization: Portugal pioneered it in 2001, and "cannabis social clubs," wherein club members can cultivate and consume their own marijuana, but cannot sell or distribute weed to outsiders, have opened up in Belgium.
However, while many European countries have long had more relaxed attitudes toward marijuana than the United States has, the drug remains illegal throughout the continent. Among Europe's current leaders, only the president of Iceland, Ólafur Ragnar Grímsson, has expressed support for full legalization.
Then there's Uruguay. In December, the country become the first nation on the planet to legalize the growth, sale and consumption of marijuana. If Uruguay's legal marijuana model is successful, the experiment will add significant punch to reform advocates who will be able to point towards both legalization overseas and back in Colorado and Washington as evidence that the sky does not, in fact, fall when the police stop kicking in the doors of marijuana smokers.
It's a heady look at the global legalization effort. The greatest social experiment of the 21st century has started. Now political leaders don't want to get left behind.
Map by Tom Mckay, Chris Evans and Anthony Sessa.