The potential economic benefits of legalizing cannabis
There are a thousand and one reasons to legalize cannabis, but today we will focus on one of the less publicized ones: the potential benefits it will bring to the economy.
The cultivation, production and trade of cannabis bring economic benefits in the form of taxes, incentives for entrepreneurs to enter a legitimate and lucrative business, but above all it has the potential to create a large number of jobs. Several countries have legalized the use of cannabis, whether recreational or medicinal, and have experienced a large economic spillover by regularizing the processes of production, purchase and sale, and the labor force that works on this plant.
The state of California is a great example. According to data published by the CDTFA (California Department of Tax Administration), tax revenues reported by the cannabis industry totaled $93.1 million in 2018. [1] This estimating that only in 5 counties of the state there are 279 hectares licensed to grow cannabis.[2] This tax goes directly to the CDTFA to be distributed to different public works and educational programs around the state.
Legal experts on taxes on other legal substances (tobacco and alcohol) suggest that the model that will surely be followed in the case of cannabis sales is the Special Tax on Production and Services (STPS) [3]. As already mentioned, this new revenue can be earmarked for education and substance abuse prevention programs, as it has been in other countries.
The demand for cannabis continues to grow and does not seem to be slowing down. In fact, in some countries like Canada, they simply have not been able to meet the demand! As an example, in 2017 alone in Colorado, 500 tons of cannabis were produced, [4] and cannabis consumers in the United States spent around $11 billion. [5] This level of production is very labor intensive, which means a huge increase in jobs across the country.
If this has been achieved in other places, who's to say that in Mexico it hasn't? In fact, by nature, Mexico has a huge advantage in this new industry because of its climate and geographic position. Once the right processes and regulations are implemented, the jobs generated by this industry have the potential to radically benefit our country's economy.
Beyond its production potential and the revenue that will be generated from industrial cannabis taxes, its legalization will also directly benefit Mexican citizens through employment opportunities.
According to a study published by BDS Analytics, as of 2017, 230,000 cannabis-related jobs have been created in the U.S. alone [5] Notably, these incorporate a wide diversity of trades and will open a door for accountants, entrepreneurs, designers, administrators and many others.
These are just a few examples of the jobs that may appear with the legalization of cannabis:
1. Accountant specializing in tax and cannabis administration: Accountants by trade who handle accounts and administration of what is sure to be an elaborate industry and process.
2. Cannabis Industry Consultant: the more the legalization process advances in Mexico or with our neighbors to the north, the more industry experts will be created. This knowledge must be shared.
3. Infrastructure Architect: As the name implies, a person who practices as an architect but is dedicated to building the infrastructure for growing the plant.
4. Master Grower: In villages in the highlands of Guerrero and Sinaloa, there is a lot of knowledge about the land and how to grow cannabis. Transitioning that knowledge into legitimate work and using more advanced methods creates opportunities for many marginalized Mexicans.
5. Regulatory Lawyer: For those who practice law, the opening of an extremely regularized sale creates spaces for legal subject matter experts in cannabis businesses.
6. Cannabis Chef: The recreational use of the plant will allow many jobs to appear around recreation. Cannabis Chef is just one example of professionals who can take this opportunity and create products and services around infusions and derivatives of the plant.
7. Marketing Directors: The legalization of cannabis in Mexico, as has already happened in different U.S. states and in Canada, comes hand in hand with very strict rules on the promotion of cannabis products. Knowing these rules and creating marketing strategies that respect and overcome them will be a great challenge and will require specialists.
8. Sports nutritionist specializing in cannabis: Hemp or hemp is a fiber with a lot of potential nutritional value for high performance athletes or "gym-junkies". Understanding its nutritional value and how to apply it to patients creates a job that did not exist before and contributes to the regulation and knowledge of the plant.
9. "Budtender": In the trade and sale of cannabis there is a need for people who know the characteristics of each type of flower and what each one offers to the customer or patient thus suggesting the best option for their needs.
10. Scientists: The more freedoms researchers and scientists have to explore the potential of cannabis, the more competition there will be to patent uses, extraction methods, commercial products and more. The job market for research specialists will grow rapidly.
Clearly, the legalization of cannabis in Mexico will bring many benefits to the economy and has the potential to become an important source of resources for the country, providing decent work options to those who previously had none.
Surely one of its many benefits will be a better quality of life for many Mexicans.
References:
[1] California Department of Tax and Fee administration. (2018). Cannabis Tax Revenue Increases In 2nd Quarter of 2018 Rise Shows Compliance Trend Growing. California Cannabis Portal. Recuperado de <Sitio web>
[2] Johnson J. (2018). Annual Northern California cannabis harvest underway as pot economy transitions. North Bay Business Journal. Recuperado de <Sitio web>
[3] García de León, V. (2019). El fisco también gana con la legalización de la marihuana. Expansión. Recuperado de <Sitio web>
[4] Wallace, A. (2019). 500 tons of marijuana were produced for sale in Colorado last year. The Denver Post. Recuperado de <Sitio web>
[5] Arcview Market Research and Analytics. (2018). Executive Summary, The State of Legal Marijuana Markets. Arcview Analytics, Recuperado de <Sitio web>
[6] Molina, M. (2016), Características del mercado de marihuana en México. Recuperado de <PDF>