The economic impact generated by marijuana in states where it’s legal is expected to top $100 billion in 2023, up more than 12% from 2022.
This is according to the MJBiz Factbook 2023, an annual report conducted by MJBizDaily, one of the most trusted sources within the marijuana industry. The report found that the economic impact of marijuana will be $100.8 billion in 2023, with it expected to grow to $115 billion in 2024 and $132 billion in 2025.
Looking ahead, the report anticipates that upward of $170 billion in additional spending will be added to the U.S economy in 2028. The increase is in part due to the “opening and/or expansion of new recreational and medical markets in states such as New York, Maryland, Missouri and Kentucky.”
To measure the industry’s economic impact, MJBizDaily analyzed similar industries, consulted with economists and applied a standard multiplier of 2.8 on projected recreational and medical marijuana retail sales. The projections are “a best estimate given the unique nature of the rapidly expanding marijuana industry, which is governed by a patchwork of state laws but remains illegal under federal law.”
The report notes that marijuana businesses “encompass a range of agricultural, manufacturing and retail operators as well as non-plant-touch ancillary companies such as lighting suppliers and law and accounting firms.” Some markets also include “cannabis events and hospitality businesses, which tend to have an even higher economic impact than other industries.”
The economic impact of the marijuana industry is not the same as supply-chain revenue that is often used to estimate the “total size” of an industry. The total amount of U.S. adult-use and medical cannabis sales, for example. is expected to reach $34 billion in 2023, up from a revised $30 billion in 2022, according to the new MJBiz Factbook.
By contrast, the economic multiplier paints a picture of the cannabis industry’s impact on the broader economy. In this case, for every $10 consumers and patients spend at marijuana retailers or dispensaries, an additional $18 will be injected into the economy, much of it at the local level. “The marijuana industry has a large impact on the broader economy, both locally and across the nation.”
The report states that marijuana businesses, consumers and patients “pay hundreds of millions of dollars in state and local taxes that are used to fund government activities at those levels, including schools and roads.” It also claims that real estate “receives a boost from new retail, manufacturing and agricultural businesses moving into an area, or established companies expanding, increasing broader demand for commercial properties.”
For more information about the 2023 MJBiz Factbook or to download a copy, click here.
