New Frontier Data released its new study Cannabis In the U.S. Economy: Jobs, Growth and Tax Revenue, 2019 Edition. The report looks at the current state of legal cannabis jobs and tax revenues and projects the impact that full federal legalization would have on the U.S. economy, especially tax revenue generation and job creation. New Frontier Data forecasts that under full federal legalization the cannabis industry could produce nearly $130 billion in additional tax revenues and over 1 million jobs nationwide.
“With so much speculation about economic slowdown, the potential for federally legal cannabis to create up to a million new jobs and close to $130 billion in tax revenue is likely going to be of interest to regulators and presidential candidates in 2020,” says New Frontier Data Founder and CEO Giadha Aguirre de Carcer. “Cannabis is already being considered as an investment option for forward-looking portfolio and fund managers as a possible hedge against economic downturn impacting more traditional investments.”
Some of the report findings include that:
- 2018-2019 YOY job growth in the cannabis industry generated nearly 82,000 jobs.
- If full legalization occurred in all 50 states today, there would be in excess of 1.46 million jobs, increasing to 1.63 million jobs by 2025.
- Full legalization would result in more legal businesses participating in the market, more consumers participating in the legal market, and more employees on official payrolls, resulting in $8.4 billion in payroll taxes. By 2025, payroll deductions would increase to $9.5 billion.
- Assuming a 15 percent federal sales tax, total revenues from 2018 to 2025 would reach $73.7 billion. This amount would be entirely new revenue to the U.S. Treasury, as there are currently no federal sales or excise taxes.
- The total combined taxes under full federal legalization would reach $175.8 billion between 2018 and 2025 based on business tax revenues, the payroll withholdings based on the estimated employment, and the 15 percent retail sales taxes.
- The difference between the current structure and the theoretical model is a $128.8 billion increase in federal tax revenues.
