Many of the history buffs amongst our readers will probably remember the 1920’s gangster movies, the bootlegging of white lightning across state lines and the bustling of the after-hours gin joints. Two of my all-time favorite movies from this era are “The Untouchables” and “Harlem Nights”.
This was the golden age of “Prohibition” and the war against alcohol. For years the government tried to shut down the consumption and distribution of alcohol on a national level until a remarkable discovery was made and the government did what they do best – legalize and tax it. The basic premise is that if you can’t stop it, then you might as well make it permissible and make sure to get something out of it.
To date, the alcohol industry has generated massive revenues. From 2018 to 2019 alone, there was a noted increase of 1.5 billion in the alcohol industry – and we won’t even talk about the uptick in sales during the onset of the COVID19 pandemic. You would be hard-pressed to find a place to go where it isn’t made available in some form or another. Now, you may be asking yourself what this has to do with cannabis. I’m glad you asked.
The Legalization of Cannabis
Fact: Marijuana is one of the most largely used “drugs” in the United States. It knows no age boundary, nor does it have an income bracket. It does not care about race, sex or political affiliation. Our courts, jails and prison systems are overloaded with non-violent marijuana-related cases. There was even a time when it was touted as being the gateway drug to a world of destructive substances.
However, as any avid history enthusiast knows, the past tends to repeat itself. This is where “the politics” come in. Just as with alcohol, the prohibition of marijuana has been a nationwide battle for generations. Our government has fought this uphill battle for so long but has now finally decided to take a closer look.
While this is probably nothing new to most readers, you’re probably wondering where the sudden shift in beliefs and values comes from. The majority comes from the medical field. Through years of numerous studies and trials, a viable use has been found to treat various ailments with cannabis or its derivatives. In turn, this has led to advocates seeking government approval for prescribing medical marijuana as a form of treatment. The results are truly remarkable – but that is a whole different topic.
What has really been an eye-opening factor for our government officials is the revenue generated by both medical and recreational cannabis sales within the legalized states. Here are a few examples:
- Illinois recently reached a state record of $138 million in adult-use cannabis sales. It also reported almost $100 million more in tax revenue for adult-use marijuana sales than from alcohol in 2021.
- California collected $817 million in adult-use tax revenue during the 2020-2021 fiscal year.
- Colorado reported that nearly $500 million in cannabis tax revenue was used to support its public school system.
- Montana, the latest state to launch its adult-use cannabis program, saw more than $1.5 million worth of cannabis sales during the program’s first two days of January, 2022.
As it stands, only 18 states have legalized cannabis in some form, but many more are sure to follow suit.
If you’re like me, you’re probably wondering how this might play out in the future. According to the cannabis industry data and analytics firm Headset, the U.S. is forecasting an income potential of $45.8 billion by 2025 with an annual compound growth rate between 2-8%. This will indeed provide a nice chunk of change in Uncle Sam’s wallet, but you don’t have to take their word alone. The U.S. Census Bureau is announcing a new plan to begin collecting and compiling data on revenue that states generate from legal marijuana. It is unclear as to when that plan will go into effect.
As we can see, marijuana has proven to be of value in many ways. Medically or recreationally, it sure triggers feelings of nostalgia and memories of alcohol’s path out of prohibition. I look forward to seeing how this all turns out.
For more historical information on the prohibition of marijuana, click here.
