In 1996, California was not the only state in the United States of America (USA) heading for the legalization of Cannabis for medical usage; Arizona was also on the same track. However, Arizona receded the decision due to conflict with federal law. California gave birth to hemp legalization in the USA. Since then, the cannabis industry has created hundreds of jobs in the USA. The ability of cannabis-related businesses to positively impact a country’s economy is not just limited to the USA. Over a while, many developed nations have embraced cannabis legalization for medicinal, industrial, and recreational purposes. The resultant has been fruitful in bringing more taxes to the government and offering quality products to consumers while enabling cultivators’ growth.
To understand the growing impact of Cannabis businesses, let’s deep-dive and look into these four areas.
A growing consumer market is a strong indicator of the rising demand for particular products. Given the stringent regulation, the black market has thrived for cannabis products’ supply, majorly for recreational usage. However, with the legalization, the Cannabis industry has become one of the fastest-growing business segments.
Prohibition Partners, one of the leading Cannabis market research and consultancy firms, forecasts that the legal Cannabis market will be worth US$ 103.9 billion by 2024. The numbers are quite bullish, given the fact that the post-prohibition era cannabis medication is still at its early stages. Europe, North America, and Canada will collectively capture 74.1% of the total market share. In contrast, the rest of the world will address the remaining 25.9% of the market share. The medicinal and recreational market will be worth US$ 62.7 billion and US$ 41.2 billion, respectively. The demand and acceptance of Cannabis medication are soaring worldwide.
For example, in Israel, the number of authorized cannabis patients has doubled in the last two years. As of August 2020, Israel has 71,323 registered patients who use cannabis medicines.
Worldwide, Cannabis enthusiasts are confident that cannabis businesses will directly increase farmers’ income. However, the notion will only get validated when it will go through a testing time. The covid-19 crisis has been a very testing time for the business. In the first half of 2020, the Cannabis sales soared in Canada. In March, Canadians bought US$ 137 million worth of Cannabis products. The strong Cannabis sales resulted in a 5.2% increment in farm cash receipt (revenue from crop and livestock sales) compared to 2019 for Canadian farmers. Without the Cannabis sales surge, the farm cash receipt would have increased just by 0.8%.
The data from Statistics Canada also revealed that crop receipt of Cannabis reached US$ 1.7 billion in 2019. The amount increased by 300% as compared to 2018.
Taxes are one of the significant sources of revenue for governments. A lot of countries are collecting millions of Cannabis taxes. Canada, which legalized Cannabis for medicinal, industrial, and recreational usage, has earned US$ 140 million in taxes in the first few months. Since October 2018, the legal cannabis industry has added US$ 3.96 billion to Canada’s gross domestic product (GDP), while the illicit market has added US$ 4.13 to the GDP.