How Legalizing Cannabis Has Changed The US Stock Market For The Better 

 August 10, 2022

The legalization of Cannabis, also known as marijuana, weed, or pot, has been quite a debate over the years. It is still considered illegal at the federal level, but laws have been relaxed and cannabis is currently legal for recreational use in 19 states and Washington D.C. and is permitted for medical use in 38 states and D.C. There are pros and cons to the legalization of cannabis in the US but it has had somewhat of a positive impact in a number of ways.


  1. Revenue


Instead of cannabis being an illegal drug, if it is legalized it can then be taxed and highly regulated. This creates a whole new market that adds positively to the economy. Legalizing cannabis will, in turn, create a whole new industry that creates many different kinds of jobs and brings in a whole lot of revenue for the country. Between 2014 and 2021 the current industry has brought in USD$11 billion in revenue. If it were federally legalized and legally available in all states and localities, then this would see a significant rise in that figure.

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  1. Health


There has been a lot of study about the health effects of cannabis and studies have shown it to help people with chronic pain, insomnia, nausea, and vomiting due to chemotherapy, as well as people who have involuntary muscle spasms due to multiple sclerosis. Another plus side is that using cannabis can help with relaxation and recovery. This in turn can help people back to work quicker and thus be less of a strain on the economy.


  1. The stock market


If cannabis was to be legalized on a federal level, then dispensaries would have a greater opportunity to trade on the stock market giving the economy a huge boost as it is estimated there could be annual generated revenue of over USD$100 billion. This would further open up people wanting to invest in US shares either locally or internationally and would provide a huge boost to the economy, with a new popular commodity available to be invested into. Canada is a good example of this where cannabis has been legalized at the federal level and people have been able to invest in the many businesses that trade on their stock market. Since it was legalized there in 2018, it has generated $43 billion for the country’s national GDP.

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  1. Money saving


States that have legalized cannabis completely have seen dramatic changes in the number of people being arrested for cannabis-related offenses. This has freed up time for the authorities to put their efforts into other more serious crimes and has also been kind to the wallet of the user, by not having to worry about pesky fines or court costs. This frees up people to add to the economy with their extra money. On a country-wide economic scale, this would make a considerable difference. This has been noted with a noticeable fall in detention for cannabis-related offenses, which, once again, keeps people out of prisons and costs less to the average taxpayer.

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The overall consensus seems to be that although there is a negative side to legalizing cannabis, it seems that doing so would generally be good for the economy going forward. It is just up to the powers that be to decide to federally legalize it and put laws in place so the industry is not abused and is properly regulated.


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