- Cannabis is recreationally legal in 10 states and Washington, DC.
- Legalization of marijuana brings in huge sums of money for the state in taxes and tourism.
- Oversaturation of the product could make it cost-ineffective, however.
- Although accidental ingestions become more likely, there's evidence that marijuana use goes down in minors and teenagers when it becomes legal.
More Americans than ever are on-board with marijuana legalization. With revenue expected to aid in education and retroactively restore rights to perpetrators of misdemeanor charges, it's becoming more accepted. For now, it's a state's decision, and multiple states such as Michigan, Colorado, and Massachusetts have made recreational marijuana legal.
Marijuana is currently legal to consume recreationally in 10 states and Washington, DC, and medically legal in 33 states. With increased regulation, marijuana becomes safer when it's not mixed with other substances and its strains' strengths and properties are clearly labeled.
When a state makes marijuana legal, here's what tends to happen.
Marijuana stocks surge.
As soon as the news broke that Canada was becoming the second country in the world to legalize the drug, stocks in the marijuana industry in Canada surged 3.34%. Interestingly enough, they also rose that day in the United States.
The CIBC, one of Canada's largest banks, predicts that marijuana will outsell liquor by 2020 and is poised to become a $6.5 billion industry.
Further, when Americans went to the polls during the midterms to vote on the legalization of weed in Michigan and North Dakota, weed stocks also surged.
The use of marijuana in underage groups appears to decline.
Despite the belief that more access to marijuana will lead to more marijuana use among teens, the opposite appears to be true. According to an annual nationwide survey from the National Survey on Drug Use and Health, teen marijuana use declined in four of the five states that had legalized feed from 2014 to 2016.
The one state that saw an increase was Alaska, and it was very small percentage, from 18.44% to 18.86%.
The supply will have to adjust to meet the demand.
Uruguay, the first country to fully legalize marijuana, is facing massive shortages. "The demand is greater than our productive capacity," Diego Olivera, head of Uruguay's National Drugs Council, told the Associated Press in 2018. "We have to address that challenge."
He estimates that in one year, between legal pharmacies and the black market, smokers consumed up to about 30 tons of marijuana, which is three times the total amount they had the capacity to sell legally.
The US state of Oregon has had the opposite problem. The state provided extremely low barriers for entering the legal growing industry, prompting black market gardeners to go legal. This backfired, resulting in an oversaturated market and a halt on growing licenses.
A study by Oregon's Office of Economic Analysis found the retail cost of a gram of marijuana fell from $14 in 2015 to $7 in 2017, which is great for customers but could make the industry unprofitable if the trend continues.
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