According to the department of finance in California, the state is likely to collect more than $1B in tax revenue from the marijuana industry once everything is in place. The department took a look at the Proposition 64 and came up with some great findings. So can we say that the states which legalized medical marijuana took the move because it seems to be beneficial in terms of the revenues expected to be generated? Well, of course, that was one of the considerations that must have been made during the drafting of the proposition but not the only one.
It’s further expected that once the laws are fully in place, the state will save about $100million that’s usually incurred as criminal justice costs. In the report given by finance department, the number of arrests related to the marijuana crimes is expected to reduce greatly following the passing of the new law. While we cannot say this are the sole reasons that pushed for the legalization of the new law, we can say that, indeed, the state will experience an economic growth in this industry that has for many years been known for wrongs and crimes. Who thought that the industry would turn out to be such great and revenue generating? Well, indeed, no one except optimists might have imagined such happenings.
It’s, however, not yet time to celebrate the big expected wins for the state because not everything is well set at the moment. Remember that there’s still confusion between the Proposition passed by the state and the federal laws. Besides that, know that recreational pots will open their doors in 2018 around January. In fact, that’s the earliest time you should expect to see such pots around your place. As we wait for that, investors and new entrants still have to prepare themselves and test the waters before they are fully into the industry. Regulatory organs are still preparing to issue licenses to the big number of dealers that will be seeking to find a place in the new industry.
California remains a great supplier of cannabis to the rest of the country. Over the years, the production costs have been declining, and we presumably expect them to reduce further following the legalization of the medical marijuana. The decline will, of course, attract new entrants because of the ease of producing the drug. With that, the supply will no doubt increase implying that the state and the government at large will receive even more revenues than projected. So, don’t be surprised when the state announces a tremendous increase in revenue collection. As we assess all these possible outcomes, we should also ask whether the changes will attract the players in the black market to leave their illegal activities to form legit companies. Can that happen? Well, with time, we’ll find out.
As we project what’s likely to happen in the industry, we should also imagine the kind of activities that companies will be doing to reap from selling medical marijuana and related products. Now imagine professional advertisements in the media trying to get people who’ll use pot on a regular basis. Should we only look at the gains and benefits to the players or we should also consider the negative impact that such adverts might have on teens and minors? That’s what California law enforcers ought to weigh and find ways of making sure that we don’t just give room to people to make huge profits while we are causing problems at the same time.
Though licensing will also be a way of generating revenue, those in charge with the responsibility of issuing the licenses should tighten their rules and issue them to the right parties. Not everyone who submits an application for licensing should have their way. Remember that some products might be made in the name of being used for recreational or medical purposes when in the real sense they are serving another purpose. It happened in other states that legalized the drug earlier than California and if not watched, the same might also happen here. We should learn from others, so we don’t end up with problems we would otherwise avoid. As we welcome the new laws and look forward to seeing the industry doing well, we need to identify potential issues and proactively prevent them.
In the long run, we are going to see benefits and at the same time report problems caused by the marijuana legalization. Everything has a positive side and the negative too. As Californians, we need to maximize the benefits but not at the expense of the losses and problems especially with our teens. Let the state enjoy getting more revenues but also find ways of overcoming potential problems from the legalization of marijuana for medical and recreational use.