It seems like cannabis is at an incredibly important crossroads here in the U.S. Two-thirds of all American adults are in favor of legalization and recreational use, just last week cannabis legalization ballot measures in five states got more votes than political candidates up and down the ticket, and studies show that more than 22.2 million people use cannabis per month in the U.S.
Cannabis use here in America just simply isn’t as controversial as it used to be. Since 2016, when Colorado and Washington became the first two states to legalize recreational cannabis, the popularity of cannabis legalization amongst average Americans has gone up nearly 20 points to that benchmark 68 percent we’re at today.
In fact, it turns out that cannabis legalization in the U.S. is an incredibly one-sided debate, crossing normally dividing lines for other topics like age, race, income level and college education status with ease.
Simply put, legal cannabis in some form is inevitable in the U.S. It’s not a matter of if, just a matter of when. That’s why so many Americans were both excited and frustrated to see Canada, their neighbors to the North, legalize cannabis and reap the financial benefits. Now Americans might have to watch as Mexico, their neighbors to the South, legalize cannabis as well.
This week Mexico’s Senate approved a bill that would legalize cannabis nationally, ending a months-long COVID-19-related delay that went all the way to their Supreme Court. Passing by an overwhelming margin of 82 votes in favor to only 18 against and seven abstentions, the bill only needs to be approved by the lower legislative chamber and be signed by President Andrés Manuel López Obrador to make Mexico only the third nation to fully legalize adult-use cannabis.
The bill is incredibly comprehensive, carving out a role for industrial hemp, allowing adults 18 and older to purchase and possess up to 28 grams of marijuana and cultivate up to six plants for personal use, clearing criminal records for past cannabis convictions within six months, and clearing the path for expansion of Mexico’s medical cannabis program, which was approved in mid-2017.
So What Does This Mean for the U.S.?
While this is no doubt a huge, historic move for Mexico, legalization south of the border could have a profound impact on the U.S. Even though more and more states have come around on the multibillion-dollar industry that is legal cannabis, federal legalization efforts have been less than fruitful.
Since cannabis was made illegal in the 1930s on the heels of Prohibition and the Great Depression, it’s been an uphill battle when it comes to its Schedule 1 status. While the state-by-state decriminalization and legalization process has been ongoing for years now, little to no real progress has been made aside from normalization and mainstream acceptance.
For a huge number of factors, however, Mexico likely legalizing cannabis might be the push the U.S. federal government needs to get their own legal cannabis industry booming. When it comes to dollars and cents, states and the federal government stand to make a whole bunch of money from legalization.
In 2019 recreationally legal states like Colorado, for example, generated an astounding $302 million dollars in tax revenue on cannabis sales alone. California has raked in more than $1 billion in taxes since they legalized recreational use in 2016. Washington state has collected nearly $400 million just from taxes on recreational sales. Simply put, states that legalize cannabis receive a massive influx of tax dollars.
Especially now, with COVID-19 ravaging the U.S. state and national budgets, states like Pennsylvania are already proposing cannabis legalization as a way to make up for those lost funds. If cannabis was federally legalized it would allow the fed to generate those same funds on a national level in a country where over 122 million people have tried cannabis. Talk about some massive earning potential.
Legal and recreational cannabis is a massive job creator and tax revenue generator in a time when unemployment is a huge issue, and states need a tax base to keep essential services running. As of 2019, the legal cannabis industry had already created 211,000 well-paying, full-time jobs. If recreational cannabis was legalized federally, those job numbers would explode. Investors would be able to pour money into cannabis growth facilities in every state, employ hundreds of thousands of people, and lift the tax burden that is petty, non-violent cannabis prison sentences.
On top of the in-national money to be made, there’s massive potential for international exporting and importing if cannabis were to become federally legal. With Canada already allowing for legal cannabis and Mexico on the verge of allowing it, the U.S. legalizing federally would allow for the legal import and export of cannabis over the border.
Cannabis is already making it’s way over our borders, both to the North and to the South, so why not set up an official, international trade deal to do so? Experts already estimate the U.S. cannabis market is worth as much as $28 billion today, inflating to as much as $41 billion by 2028. That market worth is currently dominated by black market sales, meaning state and federal governments are missing out on literally billions in taxable revenue every single year.
West Coast states like Oregon, Washington and California, all recreationally legal states who are making millions from legal cannabis, already have legislation on the table that would legalize inter-state cannabis exports and imports. If cannabis were made federally legal, that trade would be immediately possible, meaning West Coast states known for their high-quality cannabis could export to East Coast markets.
That would generate a whole lot of money without even having to take crossing the border into consideration. However, cannabis is federally illegal, so we’re going to have quite the time sorting out interstate trade let alone international trade!
In Conclusion: How Both Mexico and the US Would Benefit from Cannabis Legalization
In short, cannabis is a golden goose when it comes to making money. Cannabis is ultra-popular, used by millions in the U.S. alone and could be, especially on the heels of a financially and economically devastating pandemic, the key to balancing local, state and national budget sheets, creating hundreds of thousands of jobs, and providing a service the majority of Americans already want. Moreover, it would hopefully put a dent in the money cartels and gangs that dominate the black market in both Mexico and the US.
Let’s hope the U.S. takes the hint from their neighbors and follows suit with cannabis legalization.