Despite a lack of legalization on a federal level, the cannabis industry is expected to add around $100 billion to the U.S. economy this year alone.
According to MJ Biz Daily:
When considering whether to approve a regulated marijuana industry, advocates often tout the broader economic benefits of the additional tax revenue created.
But the beneficial impact exceeds just tax dollars.
The total U.S. economic impact from marijuana sales in 2022 is expected to reach $99 billion – up more than 20% from last year – and upwards of $155 billion in 2026, according to analysis from the newly published MJBiz Factbook.
To measure the industry’s economic impact, the MJBizDaily data team analyzed similar industries, consulted with economists and applied a standard multiplier of 2.8 on projected recreational and medical marijuana retail sales.
The numbers are a best guess because the marijuana industry’s structure is somewhat unique.
The industry encompasses agricultural, manufacturing and retail activity. But, in some markets, it also includes events and hospitality, which tend to have even higher economic impact than other industries.
For example, national parks have an estimated economic multiplier of six, according to Beau Whitney of Oregon-based Whitney Economics.
The hemp industry, which is largely driven by its agricultural components, has a standard multiplier of 1.9. That translates to an additional $11 billion for the U.S. economy in 2022.
The economic impact of the marijuana industry is not the same as supply-chain revenue that is often used to estimate the “total size” of an industry.
Rather, the economic multiplier paints a picture of the impact the industry has on the broader economy.
In this case, for every $10 consumers and patients spend at marijuana retail locations, an additional $18 will be injected into the economy, much of it at the local level.
That impact comes directly from the day-to-day needs of workers in the cannabis industry, including spending on life’s necessities such as housing, transportation, entertainment and more.
And taxes certainly play a role as well.
Marijuana businesses, consumers and patients pay hundreds of millions of dollars in state and local taxes that are used to fund government activities at those levels, including schools and roads.
Real estate also receives a boost from new retail, manufacturing and agricultural businesses moving into an area or established companies expanding, increasing broader demand for commercial properties.
In many markets, cannabis companies are restricted in where they can operate, but they often bring new business activity to areas that previously were blighted or couldn’t attract such enterprises.