WASHINGTON – In 2015, Colorado’s legal marijuana industry created more than 18,000 new full-time jobs and generated $2.4 billion in economic activity, according to a first-of-its-kind study by the Marijuana Policy Group (MPG), reports The Washington Post.
The study, based on two years of Colorado’s sales numbers measured the direct and indirect effects of legalization, which includes nearly $1 billion in retail sales in 2015, and the industry’s “spillover effects” on the state’s economy.
The news source writes that the indirect impacts include higher demand on local goods and services, such as renting out warehouse space and purchasing sophisticating lighting and irrigation equipment for growing crop. “Marijuana retailers similarly rely on other companies, like contractors, lawyers and book-keeping services, to conduct their own businesses,” the Post adds.
“If this is done right, regulated right, taxed right, this industry can bring real economic benefits to a state,” study co-author and MPG founder Adam Orens told the Post in an interview, adding, “If the state or the local governments manage, permit and enforce [marijuana regulation] in a thoughtful way, then this can have real benefits.”
The MPG estimates that most growth in the legal marijuana industry “is not coming from new, previously untapped demand for cannabis,” but from a reduction in unregulated black market sales.
"It would be easy to confuse the rapid growth in marijuana sales with an inherent growth in marijuana demand," says Orens, adding, "But that is not the case. Legal marijuana sales are increasing due to a supply shift—away from gray and black market suppliers, toward licensed suppliers."
In 2015, marijuana taxes were the second largest revenue source among excise products in Colorado (e.g., tobacco, alcohol and gaming). Combined marijuana excise and sales tax revenues were $63.4 million in 2014, and $121.2 million in 2015. For 2015, they were 14% larger than casino/gaming revenues, and almost three times larger than alcohol revenues.
Also in 2015, cigarette revenues were the largest excise source for Colorado at $180.1 million, but MPG estimate that this revenue source is declining due to a general downward trend in cigarette sales. The MPG projects that marijuana revenues will surpass cigarette revenues by 2020.