The growth of the cannabis industry in the U.S. has been nothing short of exceptional, and every other superlative that can be used to quantify it. With the odds stacked against it, it rose against the tides and did the unthinkable, becoming a mainstay industry in America and turning out great numbers. Last year alone it made almost $16 billion in sales and has made a net sale of $55 billion in the past few years of its inception.
One of the many challenges that the industry has had to face is the non-legalization at the federal level. The federal government still classifies it as a schedule 1 drug making it illegal and thus creating some holdbacks for the industry such as lack of financial support by the financial institutions as they are reluctant to go against the ruling of the federation. Another challenge is the exorbitant taxes the industry is levied with despite its non-regularisation by the federal government.
The cannabis industry is still levied with paying tax at the federal level even though it is illegal, this tax comes under the internal revenue code of the 280E, this excise tax is a tax levied by the government on products it perceives as harmful to citizens such as alcohol and cigarettes to dissuade the organizations from engaging in it. However, there have been calls from different sectors pushing the federal government to shift its stand seeing that cannabis has more advantages than disadvantages.
The federal government is gradually yielding as can be seen with the introduction of the right to try and the Farm bill which allows patients with a terminal illness use cannabis as an experimental therapy and the Farm bill which makes hemp legal as it is very low in THC, the compound that gives the high in cannabis plants.
The U.S. states have been a huge factor in the growth of the marijuana industry, having seen the possibilities that it holds if used medically and used right. Plus realizing that the marijuana black market was getting huge and they would have problems on their hands if not controlled and regulated, most states decided to legalize the use of cannabis at one level or the other. Thirty-three states have legalized the medical use of marijuana while eleven have gone further to legalize its recreational use.
Marijuana has been scientifically discovered to be effective in treating chronic pain, epilepsy, arthritis, multiple sclerosis, among others. States that have legalized marijuana use, have a medical marijuana program in place that regulates and controls how patients use it, the access they have to it, and ensuring they get quality. This is achieved by ensuring all patients registered with the state agency in charge and get the drug through a licensed dispensary. A dispensary is where a registered patient can access medical marijuana which has been tested and quality is guaranteed, dispensaries are all over as they have been the main sales force of the industry seeing that there are thousands of them.
Rapid Industry Growth
The industry has provided 250,000 jobs since its legalization across most states and has had a cumulative growth rate of 110% from 2017 to 2019, by far the fastest of any industry. Statistics also show that about 55 million Americans use cannabis, the recreational cannabis sector made about $10 billion in 2018. Interestingly, the cannabis sector is one of the most inclusive and has about 35% of women in managerial positions as compared to 15% obtained in other sectors.
The average job growth rate expected is 21% over the next two years. The average yearly salary of a cannabis worker($58,511) is 10% higher than the average across the U.S. and the average dispensary makes $3 million annually. The industry has been projected to reach $80 billion by 2025, the employment numbers of the industry are also expected to grow to 330,000 by 2022 which are higher numbers than the coal, steel, and iron industry.
The government hasn’t been left out as they have made a huge amount in taxes especially from states that have made marijuana legal for adult use. In 2018, the Washington government was the biggest earners in tax making $319 million, followed by California with $300 million and Colorado with $266 million. Tax revenue has also been on the rise, there are several tax reductions on medical marijuana and recreational sales that the field the government is harvesting.
In 2015, net tax made from recreational sale was $302 million, in 2016, it was $589 million, 2017 saw it rise to $834 million and it saw an astronomical growth and hit $1.3 billion in 2018, it is projected to hit $1.6 billion in 2019 which is a cumulation of sales and excise tax. California, Washington, and Colorado have been the major contributors as they have legalized recreational marijuana the longest and have a fully working system.
The Future Of The Industry
The future is looking bright for the cannabis sector as there have been strategic moves to ensure both the medical and recreational sectors are doing great. The medical marijuana programs across boards in various states offer lower taxes, a wider range of strain and quick access to physicians. Statistics show that 55 million Americans are buying cannabis legally both medically and for recreation.
This would ensure that patients have no real reason to stop buying and cross to recreational stores. While adults who need marijuana for recreational use can access it in states that offer for sale quickly. The projected numbers and statistics show that the industry is going to thrive for a long time to come.