Green isn’t just the color of cannabis, but cash, too. And thanks to your valiant efforts of consumption, the industry is looking to help out the economy. Info from the newly released MJBiz Factbook reveals that the economic impact of regulated marijuana sales in the U.S. could exceed a whopping $112.4 billion in 2024. That’s a 12% growth compared to last year.
Overall, the Congressional Budget Office forecasts a slowdown in economic growth for 2024 due to higher unemployment levels and reduced inflation. As a result, the Federal Reserve is likely to lower interest rates starting in mid-2024. After this, economic growth is expected to rebound in 2025 (mark the year in your calendars hopefully you’ll have extra money for weed) and then level off in the following years. So, while 2024 isn’t likely going to be one of the best economic years on record, that’s not the cannabis industry’s fault. Without it, we’d be $112.4 billion poorer as a nation. And as new cannabis markets emerge, the industry is projected to contribute over $200 billion in additional spending to the U.S. economy by 2030.
While there were sales dips in established western markets (licensed retailers in California reported taxable sales exceeding $5.1 billion in 2023), marking a 4.7% decline from the previous year, according to the latest year-end data from the California Department of Tax and Fee Administration, you may have read about the California mass extinction), the cannabis industry continues to see growth through the expansion of new recreational and medical marijuana facilities in states like Maryland, Missouri, and New York.
While it’s exciting to see that the cannabis industry is going to add hundreds of billions of dollars to the economy, keep in mind that MJBiz’s date doesn’t account for potential U.S. government actions like federal rescheduling or legalization, each of which could boost revenue and economic impact. While Biden has said he’d reschedule cannabis and expunge more cannabis convictions, he hasn’t turned out to be the great liberal hero who legalizes marijuana for all. Donald Trump has been all over the place when it comes to cannabis. Thirty years ago, he said drugs should be legal, but he has backpedaled in modern years to appeal to his conservative voter base. Twenty-five years later, at the Conservative Political Action Conference, he said that he thinks marijuana legalization is “bad” and that he feels “strongly about that.”
To come to the figure of $112.4 billion of economic impact, MJBizDaily applied some epic math by looking at comparable industries. Then, they used a standard multiplier to estimate projected sales for recreational and medical marijuana. The economic multiplier illustrates the broader economic impact of the cannabis industry. It suggests that for every dollar spent by consumers and patients at adult-use stores and medical marijuana dispensaries, an additional $2.50 is circulated into the economy. This money primarily benefits the local economies that sell the cannabis in the first place.
Keep in mind that the economic impact of the marijuana industry is different from supply-chain revenue, which is commonly utilized to gauge an industry’s ‘total size.’ According to the MJBiz Factbook, total U.S. sales for adult-use and medical cannabis are projected to hit $32.1 billion in 2024 and rise to $58 billion by 2030.
The term “economic impact” describes the effect of an industry (or an event) on the economy of the corresponding region or country. This includes economic growth, employment, wages, and overall economic activity changes. The economic impact includes direct impacts, such as the immediate benefits from business spending and salaries; indirect impacts, such as additional economic activity from local suppliers fulfilling new demands; and induced impacts, which happen from employees spending their paychecks locally. Knowing the economic impact helps stakeholders understand the economic value of different industries and make corresponding decisions.
The projections represent the best estimates available for the ever-evolving marijuana industry, which is different from others as it operates under a complicated and ever-changing set of state regulations yet is still illegal federally (until, of course, we elect someone down to make some real progress). The cannabis industry is vast and includes agricultural, manufacturing, and retail sectors, as well as businesses that don’t sell weed but help the cause, like lighting suppliers and cannabis-friendly accounting firms. The number even includes 420-friendly events and hospitality businesses, which can really improve our economy, per the data, and make you feel good about taking part in your local cannabis community.