Schedule a Free Consultation

facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Legalizing Marijuana Is Controversial, But the Economic Impact Speaks For Itself: Here's What We Mean Thumbnail

Legalizing Marijuana Is Controversial, But the Economic Impact Speaks For Itself: Here's What We Mean

Data from the Pew Research Center shows the amount of Americans who approve of the legalization of marijuana has steadily increased over the years.1 This shift became more apparent in the months surrounding the 2020 election period, as every state voting for marijuana legalization approved the ballot. And, though marijuana legalization brings economic benefits to states that begin regulating the drug, there is still much controversy surrounding the subject. Let’s examine some of the opinions and economic impacts to better understand the conversation. 

The Opinions on Marijuana Legalization

According to that same Pew Research Center study, the majority of Americans believe marijuana should be legal for recreational use, while 32 percent feel it should be used for medicinal purposes only and eight percent believe it should not be legal at all.1 Many of those opposing legalization cite car accidents and additional drug use as reasons, while many of those for legalization cite medical benefits and reduced law enforcement concerns.1 

The Potential Economic Impacts of Marijuana Legalization

As the first state to legalize medical and recreational marijuana, Colorado provides an example of the economic impact of legalization. Data from the Federal Reserve Bank of Kansas City shows that legalization improved employment by 5.4 percent over four years, totaling 0.7 percent of total employment and contributed to about two percent of the state’s total tax revenue.2 Upon legalization, for recreational or medical purposes, marijuana legalization can impact a state’s economy in other ways.

Impact #1: Job Opportunities

With a new, regulated market, many jobs become available. This is not limited to jobs in the marijuana industry, but can also include secondary or tertiary industries. Companies that produce farming equipment, transportation, medical products and inspection equipment are just a few examples. 

Impact #2: Increased Tax Revenue

As shown above, with regulation comes taxes. Many states determine marijuana taxes based on local factors. But what is consistent is that many states distribute tax revenue to education programs, healthcare, public safety and state savings, according to information from the Tax Policy Center.3 Many states may distribute revenue this way to offset the negative effects of marijuana legalization.

Impact #3: Boost State Economies

Marijuana Business Daily projects marijuana sales to reach $19.4 billion to $23.5 billion between recreational and medical use.4 This increase in sales has an impact on local economies, which results in increased tax dollars towards the previously mentioned tax programs. 

Impact #4: Improved Police Procedures

Supporters of marijuana legalization state that the police would be free to pursue more serious crimes, rather than marijuana possession crimes. And, though the NJCRS does show an improvement in crime trends in marijuana-legal states, the study states that it is difficult to determine whether legalization was the primary cause.5 However, a reduction in crime rates could improve police procedures and reduce the cost of jailing and court procedures. 

Impact #5: Growing Investment Opportunities

New markets create new investment opportunities. Just as marijuana legalization generates jobs, taxes and GDP, so too does it improve the opportunities of investors in these industries.

Impact #6: Reduced Medical Marijuana Costs

According to the Harvard Medical School, CBD is shown to be beneficial for many medical conditions and is considered safer and less addictive than opiates.6 The legalization of recreational marijuana would increase the total amount of available product, reducing the cost of medical marijuana and its byproducts.

Marijuana legalization remains controversial. And whether you are for it, against it or somewhere in between, the fact remains that there are some economic benefits to consider. However, marijuana legalization could result in serious public health and safety concerns. Comparing this damage to potential economic benefits is necessary as the trend in state legalization continues.

Click here to schedule a call with a BWC advisor today.


The information presented in this article is obtained from or based on sources believed to be reliable. BWC does not represent or warrant its accuracy or completeness and is not responsible for losses or damages arising out of errors, omissions or changes or from the use of information presented in this article. The article does not purport to contain all the information that an interested party may desire and, in fact, provides only a limited view. Information presented does not constitute an offer to sell or a solicitation of an offer to buy any security.

All investments involve risk, including loss of principal invested. Past Performance does not guarantee future performance. Individual client accounts and performance vary. BWC does not provide tax advice.

About Beirne Wealth Consulting Services, LLC –

Beirne Wealth Consulting Services, LLC (“BWC”) is a privately owned, SEC Registered Investment Advisor with offices in Connecticut and Pennsylvania. BWC provides independent, fee-based investment management services and customized financial planning solutions. Our institutional business provides consulting expertise to defined benefit and defined contribution plans, endowments, foundations and non-profit organizations. Our private clients include high net-worth individuals and prominent families, many of whom bring complex wealth management challenges and multigenerational planning needs. For more information, please visit or give us a call today at 888-231-6372.

*Registration does not imply a level of skill or training.

© 2021 Beirne Wealth Consulting Services, LLC (BWC). All rights reserved. Reproduction or Use without permission is prohibited.