California is preparing to launch a fully legal cannabis trade that stands to boost the state’s economy to the tune of $5 billion, according to a report from the Los Angeles Times.
The piece, which is based on a new study from the University of California Agricultural Issues Center, says that, while the state’s newest version of a cannabis industry will undoubtedly generate impressive revenues, it will likely take some time before the entire scope of the cannabis community gets onboard with a fully legal system.
The study shows that around 30 percent of the state’s pot buyers will still frequent the black market in order to avoid paying taxes and other aspects of the legal trade.
But the gap will eventually close—just like it did once alcohol was finally pulled from the grips of prohibition.
“It’s going to take some time. While it’s unlikely that everyone will come into the regulated market on Day One, we plan to continue working with stakeholders as we move forward to increase participation over time,” said Lori Ajax, director of the state Bureau of Marijuana Control, the agency that commissioned the study.
Still, right out of the gate, more than 60 percent of the state’s cannabis buyers will go completely legitimate.
“We projected that when legally allowed, slightly more than half of the demand currently in the illegal adult-use segment will quickly move to the legal adult-use segment to avoid the inconvenience, stigma and legal risks of buying from an unlicensed seller,” the study authors wrote.
Unfortunately for some, the state’s medical marijuana market is about to be turned into rubble from the wrecking ball that is the recreational sector.
Only about nine percent of the market is expected to continue buying weed from medical marijuana dispensaries.
Researchers anticipate that this sector, which has been vibrant for the past two decades, will take an enormous hit, plunging from $2 billion to around $600 million as soon as adults 21 and over can buy marijuana in the same way they do now with beer.
This factor alone has researchers convinced that California will soon see a substantial increase to its $117.5 billion tourism trade—potentially becoming the largest state in the nation for tourists looking to catch a glimpse of the legal weed experience.
“Given that adult-use cannabis remains illegal in most other states, California’s legalized adult-use industry may attract some new visitors whose primary reason for visiting the state is cannabis tourism, as has been observed in Colorado,” the study said.
Although an increasing number of states have legalized marijuana over the past few years for recreational purposes, none stand to become more of an influence on federal policy than California.
In 2015, Lieutenant Governor Gavin Newsom said the success of marijuana legalization in California could be what finally leads to the end of prohibition nationwide.
“A lot of eyes are on California,” Newsom told Bloomberg News. “It’s very different than almost any other state because of the scale and the magnitude of the change and what it will represent across the country.”