The California Department of Finance has just released a report that suggests a substantial annual profit for the state, which is currently strapped for cash.
The estimate of revenue that recreational marijuana legalization can provide is up around the $1 billion mark, although there is still some speculation into the factors that could hinder this $1 billion profit.
With the state facing almost $450 billion in debt, this could be a complete blessing for California. There are of course going to be hurdles to overcome when it comes to recreational legalization. The Adult Use of Marijuana Act, so long as it is passed in the state, is going to allow California to make a financial and industrial comeback through the cannabis industry.
Final results could vary
There are some concerns as to how the different factors are going to effect the final revenue, despite the enormous estimate. “In total, our best estimate is that the state and local governments could eventually collect net additional revenues that could range from the high hundreds of millions of dollars to over $1 billion annually”, according to California’s best economists. However, the USA is facing countrywide bans on all marijuana sales at the moment, and this could obviously hinder the process for California.
There is also the issue of the current consumption rate declining in California. Despite it being a huge economy when it began 20 years ago, there are currently fewer people involved in the industry. Dispensaries and growers are finding harder and harder to stay afloat, and concern is slowly rising over this.
How will the money be used?
According to the Adult Use of Marijuana Act, there is a schedule as to how the money is going to be distributed around the state to assist the state in getting back on its feet.
- $10 million will be distributed annually to public universities to research the implementation of this measure
- $3 million will be given to the California Highway Patrol to manage the possibility that drivers will be driving under the influence of marijuana
- The Governor’s Office of Business and Economics $10 million will be given annually for the first ten years, with this increasing by $10 million for the following ten years, and finally increasing to $50 million each subsequent year. This money will be for the purpose of helping those affected by past federal and state drug policies
- $2 million for the University of California San Diego Center for Medical Cannabis Research to study both the medicinal properties as well as the adverse health effects of marijuana consumption
The distribution of this revenue seems fair in supporting the research of medicinal cannabis in a really productive way. It is especially impressive that the majority of this money will be used to assist those that have been the victims of outdated drug policies. If medical marijuana can stay afloat in California, this could be just the godsend that the state is looking for, and this act has the potential to change the face of marijuana in California.
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