Despite it being an illegal substance at the federal level, several states have laws allowing for the legal sale, and use of cannabis. The industry is exploding, and it has grown by leaps and bounds over the last couple of years. In fact, Americans purchased $6.7 billion worth of cannabis in 2016, a 30 percent increase over 2015. This is an astounding figure, especially when you consider that the industry is still in its infancy. The last time such a huge growth spurt occurred in an industry was the dot-com era, but, experts say legal cannabis will continue to grow at unprecedented rates over the next few years.
Legal Cannabis Timeline
The U.S. Government has regulated, and restricted the sale of cannabis since 1937. The restrictions, and penalties increased until 1970 when the Controlled Substances Act was established. This divided drugs into categories based upon their perceived medical usefulness as well as their potential for abuse. Cannabis ended up being deemed a Schedule I drug, which is the most restrictive and includes other substances such as heroin. Throughout the decades, countless individuals have been prosecuted and jailed for growing, selling and possession under these laws. In wasn’t until 1996 that the first medical cannabis proposition was brought before California voters under Proposition 215. Since then, voters have approved medical use in 28 states and the district of Columbia and eight have laws allowing for recreational use of cannabis by adults.
Benefits Of Legalization
While there is little doubt in the mind of medical cannabis users that it’s an effective treatment for a variety of ailments, they aren’t the only ones benefiting from its legalization. Obviously, growers, dispensary owners, servers and others working directly with the product are seeing financial gains from legal cannabis, but that’s just the beginning. There are also a multitude of peripheral businesses that are cashing in on the increased sales including, those that sell smoking accessories, grow equipment, and even real estate. States such as Colorado have seen a huge increase in tax revenue from cannabis businesses as well. While the money seems to be pouring in, legalization has also curbed arrests, and diminished spending on enforcement of what many consider draconian drug laws.
Seeing Into The Future
Industry watchdogs and analysts are predicting that the cannabis industry will continue to grow at a blistering pace over the next several years. Some figures indicate growth of at least 24 percent compounded annually, which would mean that sales would exceed $8 billion in 2017 and upwards of $20 billion by 2020. These stats depend, of course, upon the stance Trump’s administration takes on federal law versus those that states have enacted. If, for example, the government decides to enforce federal regulations that deem cannabis as a dangerous, and illegal, substance, state laws would be considered null and void and those engaged in the business could find themselves in legal hot water. On the other hand, a change in the classification from Schedule I to, for instance, Schedule II would give the FDA authority over the industry.
The legalization of cannabis for medical and recreational use continues to draw attention from advocates and proponents alike. Its financial impact has been dramatic thus far, and it doesn’t appear to be changing anytime soon. In fact, voters in eight states said yes to legalized medical cannabis just this past November and more states are likely to follow suit in the coming years. Those that support the movement applaud these efforts and continue to work to educate the public, and lawmakers on the benefits of legalization for patients and the economy. Time will tell, however, if the federal government will change its stance on cannabis with regards to its classification, or if it will continue to enforce the law as it is written.
This post was originally published on March 27, 2017, it was updated on October 5, 2017.