Monday, November 4, 2013
Marijuana Market Poised To Grow Faster Than Smartphones: Report
http://www.huffingtonpost.com/2013/11/04/marijuana-market_n_4209874.html. Due 11 Nov 2013. What are the economics implications of a growing marijuana market. Include comments on: federal tax revenue, law enforcement employment, reduction of price, prison costs, and blackmarkets......
Subscribe to:
Post Comments (Atom)
The economic implications of a growing marijuana market are multifold. The marijuana market would generate billions in tax revenue annually to the US.The federal legalization would offer a large new revenue stream. Aside from taxes, state and local governemnts also stand to save billions of dollars that they are currently spending on the regulation of marijuana. The opportunity cost would come in the form of reducing prison population and conversely reducing the billions of dollars funneled into marijuana related incarceration. Law enforcement would also save billions of dollars without having to focus on marijuana related crimes. Employment would see a drastic surge as thousands of jobs are created from the burdgeoning marijuana industry. Officials estimate that the price reduction of marijuana could be as much as 100 times less than the current price. Another economic implication would come in the form of destroying the entire black market industry, moving virtually all of the market shares to a US regulated industry. Marijuana legalization would also prove detrimental to Latin American cartels in that it would essentially put their US marijuana industries out of business. All in all, marijuana legalization would pump billions if not trillions of dollars into the US economy.
ReplyDeleteIf marijuana becomes legal on the federal level and it is decided that it be taxed, federal tax revenue will sky-rocket. Employment of law enforcement will decline as they will not need as many people working law enforcement due to less work cases to follow through. However, DEA agents know the ropes of growing and selling marijuana and if they are laid off, it would not surprise me if they moved into that sector. They pretty much know the best ways to grow weed and how to distribute it after all the times they've taken down entire operations. Prison costs would go down because less people would be in jail. I feel as though street level dealers will have a hard time selling because of the widely available product on the market. However, growers I think will do excellent on the black market since it is fairly easy to grow marijuana and they can sell it at much cheaper prices than market price. If weed is legalized, it will be pretty difficult to find out who is selling on the black market and I think it will be easy to get away with. I project that the day pot is legalized federally, demand will sky-rocket driving prices up very high initially and then after time with change in consumer taste, the price will drop steadily till it reaches some point at equilibrium. selling marijuana and if they are laid off, it would not surprise me if they moved into that sector. They pretty much know the best ways to grow weed and how to distribute it after all the times they've taken down entire operations.
ReplyDeleteAnother thing that might happen is that people will just start growing their own weed which would have a negative effect on the economy because nobody is buying anything. (I guess it might drive them to buy more snack items)
ReplyDeleteThe growing marijuana market will have an effect on the economy. The federal tax revenue will increase drastically when marijuana is completely legalized, most likely there will be an excise tax placed on the sale of marijuana. This will cause an increase as people become dependent and addicted to it's use. The law enforcement employment will decrease however, because there will no longer be any need to 'bust' these marijuana growers and distributors. Before any legalization of the use of marijuana for medicinal or recreational use, many law enforcement employees dedicated their time to finding these blackmarket distributors. As the use of marijuana becomes popular and its legalization provides for the increase of people interested in its distribution, the abundance of marijuana will cause a dip in the prices. However I think that the taxes that will be placed on the marijuana will make up for some of this reduction in price. Prison costs would probably go down as well, primarily because all the people who grow marijuana will not be sent to prison and this will save time and money. The last implication would probably be that the reduction of the marijuana black market, if the supply of marijuana is legal, a black market will no longer be necessary.
ReplyDeleteWith an industry like the marijuana market expanding as exponentially as it does, it is important to examine the potential economic outcomes of this process. The marijuana market is expanding across states that are legalizing it for both medicinal and recreational purposes at a staggering rate. Eventually, the majority of states will legalize marijuana for recreational purposes by 2018, according to the article. It is likely that the government will place an excise tax on this market, also known as a "sin tax". Tax revenue will increase as rapidly as the market itself. Law enforcement employment may go down due to the smaller necessity to catch illegal marijuana users and growers, and prison costs could diminish with fewer criminals arrested for possession of marijuana. Price will go down as a result of the automatic shift of the supply curve right since an incredible number of suppliers will be added to the market. Suppliers will exit the black market which will directly affect the supply and demand model for marijuana. The legalization of marijuana could be economically beneficial.
ReplyDeleteA growing marijuana market would balance the US' national budget being that marijuana is a significant source of revenue. The expansion of the marijuana market would most definitely have a positive impact on income tax and sales tax. BILLIONS of dollars that are currently spent by state and local governments on the regulation of marijuana use can be saved and put to something more useful and less costly. Some believe that the expansion of the MJ market will contribute to more violence and crime, possibly causing an increase in the need for law enforcement employment. Prison costs would most definitely go down. If no one is being arrested for stimulating the economy by buying and selling Ganja, tax dollars will be saved and useful elsewhere. The final economic implication would the destruction of the black market for Marijuana. With that being said, all market shares can be moved into the US' regulated industry with no problem.
ReplyDeleteCitizens and government officials across the United States have been trying to “hash” out, for lack of a better word, the pros and cons of the controversial topic of legalizing marijuana use. Currently, only medical marijuana has officially been legalized in 20 states as well as the District of Columbia. However, as public attitude shifts and more and more people begin to dismiss the idea that marijuana is gateway drug, states like Washington and Colorado have begun planning on implementing laws next year that allow pot to be sold to and used by adults for recreational purposes.
ReplyDeleteAs the acceptance of pot grows, economists believe profits will too. It is predicted that within the next 5 years, another 14 states will legalize the sale of cannabis, which alone has the potential to create a $10.2 billion market by 2018. If you add the additional market for ancillary products, such as security installments, grow tools, paraphernalia, and lets not forget Munchies, potential profits will increase even more. Because of a new and increased amount of suppliers will be added into the market, the supply curve will shift to the right, consequently, lowering the price. As Jeremy, Nadia, and Sam explained, it is highly likely that the government will place an excise or sin tax because of the markets inelasticity. As a result, this will generate larger tax revenues.
The war on drugs is an expensive one and the legalization of marijuana would end up saving the government billions of dollars by cutting costly expenditures on enforcement and incarceration. The marijuana market may increase some jobs, as more people will become interested in the distribution and solicitation of the drug. However, the law enforcement employment may decline as marijuana users and growers are no longer considered criminals. On the other hand, many believe this will allow law enforcement to focus on catching the “real bad guys.” The black market sale of marijuana will no longer be necessary, destroying criminals’ illegal profits, instead pumping billions into the US economy.
Though I personally feel that the legalization of marijuana for recreational purposes is morally incorrect, I do see how it would be very beneficial to the US economy.
The question I leave you all with, however stupid you may think it be, is:
Would worker productivity suffer? Would students school performance and graduation rates decrease? How far is the US willing to go to save/make money? What are the social costs and are they really worth it?
Marijuana should be legalized for many reasons. It would bring in so much revenue and cost the US so much less money on taxes for jail and prisons. Researchers surveyed hundreds of medical cannabis retailers, processors, dispensary owners and industry leaders over the course of six months this year, and estimated that more than $1.43 billion worth of legal marijuana will be sold in 2013. The report also predicts that figure to grow by 64 percent, to $2.34 billion next year.The federal government, however, has yet to catch up to this rapid evolution. Even in states that permit marijuana use, cannabis remains illegal at the federal level, and the Controlled Substance Act classifies marijuana as having no medical value. Federal raids against dispensaries in California over the past two years have shuttered hundreds of businesses and hindered the industry's growth.
ReplyDeleteLegalizing marijuana would generate millions of dollar of federal tax revenue. Law enforcement employment would plummet because it is no longer needed to arrest people who abuse marijuana. To prevent the existence of black market, the cost of marijuana would decrease. Since millions of people are arrested each year because they were found smoking marijuana, legalizing marijuana can reduce the prison cost. Marijuana black market will be destroyed once the new law is passed. It is said that Federal acceptance of marijuana is not going to happen in one fell swoop; It will happen incrementally, with important steps along the way.
ReplyDeleteThe growing marijuana market will have a significant impact on the economy. One of the foremost implications will be on tax revenue, which will inevitably increase with the growing market. Once it becomes legalized on a federal level, the drug may even have an excise tax. Law enforcement employment will not prosper along with the market, however. Rather, it will probably see a decline in the need for so many officers, since it will no longer be necessary to search for illegal marijuana growers and sellers. On the other hand, we will very likely see an increase in employment for jobs associated with the marijuana market, as more people will be needed for the efficient manufacture of the drug. The price of the drug will also reduce, since the supply will increase and consumers will have more options of manufacturers to choose from. Prison costs will decrease as well, because there won't be as many people with drug-related crimes being penalized. Another important implication of the growing marijuana market will be on black markets. With the drug becoming legal in most states, and possibly on a federal level soon, there will be no need for a black market to exist, therefore black market sellers will need to invest in a new job.
ReplyDeleteA growing a marijuana market and it's implication on the economy would be phenomenal. Currently it is estimated that the marijuana market will sell more than $1.43 billion worth during this year alone, this means serious cash and serious chance for the government to make some money by taxing each of these sales. These excise tax will improve the government's overall economy and will help fund other sectors of the United States in need of money. The price market will decrease since it's legal status will attract more sellers to the market, which in turn will decrease its price. The prison force will also decrease since people are currently being arrested for having marijuana but if it was legalized, there would be less people in prison which will then decrease the funding needed for the prison since there is less to do. This funding then could go to other areas that are in need of money.
ReplyDeleteThe marijuana market has the potential to create major impacts on the economy of our country. Recently released data displays that the marijuana industry has grown more than the smartphone market. The economic implications of the ever growing sales of marijuana are contrasting. A federal tax on the sales of cannabis can have both positive and negative impacts. The tax would generate a substantial income for the federal government that would in theory help us pay back our debts, however, too high of a tax could simply create a new black market. Just like the Whisky Rebellion in early American history, people will not want to pay an additional fee on their pot and would begin to illegally trade it, defeating the purpose of legalizing marijuana in the first place. America has one of the highest prisoner rates in the world and a large portion of the imprisoned are there because of marijuana. This is costing the country millions. If the marijuana market was to continue to expand and acceptance were to grow, less marijuana related imprisonments would occur and less money would be needed to run jails. These benefits however are contrasted by the employment rates of law enforcement. The less crimes being committed the fewer cops we need. These job losses could outweigh the benefits of the expanding pot market. A simple supply and demand curve can show how an expanding marijuana market will affect its price. As stated earlier, prison rates would decrease. As far as blackmarkets go, the growth of the medical and recreational marijuana use market will shrink the underground sales, for cannabis will become more regulated. Increased legalization can eliminate the blackmarket for pot all together.
ReplyDeleteThere are numerous economic implications to a growing marijuana market. The US would generate millions of dollars with the rapidly growing market for marijuana. All of the income the US would be making would be able to lighten the federal burden of taxes on the American public. Although few law enforcement officials would be laid off, most would keep their jobs and would shift their focus off busting marijuana users to other criminals. If legalized, marijuana would not be as expensive because more supply would be grown. Prison costs would immensely decrease because those who were arrested for marijuana usage will not be inhabiting them. Marijuana will no longer be sold as much in black markets if it is legalized. When individuals buy marijuana in the black market, there is a higher risk for the marijuana to be laced and have 'other' ingredients in it. In total, marijuana legalization will aid our economy immensely.
ReplyDelete-Anita Pizzirani (Pizza)
Period: 1
There are many implications of the marijuana market. A new market for marijuana means new taxes on marijuana. An industry estimated to be worth $2.34 billion next year is bound to be a lucrative source of government revenue. This will also increase legal efficiency. If marijuana is legalized, then law enforcement can be allocated to take care of crimes with victims, or involving harder drugs, rather than wasting time in pursuit of marijuana sellers. This may reduce law enforcement employment but it will ultimately make the process more efficient. Marijuana, no longer being a black market good, will become more affordable because it's easier to get and grow without having to circumvent the law. This will decrease the input costs of the good and decrease the price. Prison costs will go down because they will no longer have to house marijuana sellers, and they will be less congested. Blackmarkets will go away or become far less common because if marijuana is legal there is no reason to circumvent the law, and the lack of marijuana as a black market good makes black markets less lucrative overall and reduces their frequency or likelihood.
ReplyDeleteThe marijuana market is exponentially growing and has affected the U.S. economy greatly. A recent report has predicted that the market for marijuana will grow 64% over the next year. A growing market such as this one would cause dramatic increases on the federal tax revenue. Since marijuana is a mentally addictive drug, the demand for it would be inelastic. Therefore if marijuana was to be completely legalized, an excise tax would be placed on it by the government. The demand for law enforcement employment would decline with the legalization of the drug. Law enforcement is needed now to catch and charge criminals who grow or carry amounts of marijuana, but would not be needed if possession of the drug became legal. Overtime, prices of marijuana would decrease and prison costs would also decrease. The black market for marijuana would essentially be reduced since under the counter sales would no longer be necessary.
ReplyDeleteIf the marijuana market were to be legalized it will have a significant impact on the economy with first the federal tax-revenue being sky-rocketed, with this being legalized this was estimated to be worth 2.34 billion within the first year after. Law Enforcement Employment will be drastically reduced, and millions of dollars would probably be save and on the other hand due to the legalizing of marijuana markets many jobs will be created, creating a lower employment rate for the U.S.
ReplyDeleteThe reduction costs of this product will probably go down considering the demand for it, so as more is wanted to price will go down, and be decreasing, this will also lead to a decrease in the prison costs because less people will be put in jail if marijuana were to be legalized and prison's will be easier to maintain.
The growing of the marijuana market will have a significant affect on the United States economy in several ways. The tax revenue that the Government will receive is one the the biggest implications. They will charge marijuana with heavily placed taxes so they can get enormous profits from consumers. There is a chance that a excise tax will be placed on it as well which will also boost the economy even more by getting more money from marijuana sales. The law enforcement employment will most definitely see a decline because the need to monitor marijuana and the distribution of it illegally will diminish since it has become legalized. So there won't be a need for them to hunt down drug dealers I shall put. The price of marijuana will drop because of it being legalized more people will want it. The prison cost will also go down based on the fact on how people who would go to jail for having marijuana won't be arrested if it's legalized. This creates more free space in the prison and less people to work on the prison will will lower the overall prison cost. The black market will fade away as well because of how there won't be a need for it if people can just go and buy marijuana at a drug store.
ReplyDeleteThere are many economic implications for the growing marijuana industry. As this market grows, the federal tax revenue will increase because we will be able to tax the sales. This can help pay off the national debt. We wouldn't have to hire as many law enforcers because nobody would have to be smuggling marijuana. So in turn there would be less of a black market because it is readily available. This also means less people in prisons because we aren't locking people up for smoking pot. Also if the supply of marijuana exceeds demand, then price will go down. If the demand exceeds the supply, the price will go up.
ReplyDeleteThere are many implications of a growing marijuana market.
ReplyDeleteWith the legalization of marijuana the federal tax revenue will rise, due to the sales tax allowed to be added. As for the law enforcement, there wont have to be many people watching the black market, since the main product has been legalized. The price of the newly legalized marijuana will drop because of the demand for it. The prison costs will decrease because the marijuana users that used to get arrested for possessing marijuana will no longer be getting arrested. The black market will become reduced because there won't be a need for it.
The legalization of marijuana would add to the GDP of the United States as a good and would add more services. The medical marijuana industry is worth over 1.43 billion USD and is expected to grow more than 64 percent. Government taxes on marijuana production and distribution could create a noticeable increase in tax revenue. The legalization of marijuana could also decrease the amount of prison inmates in for marijuana related crimes. The increased federal tax revenue coupled with decreasing costs in prison systems could help upright federal deficits. Blackmarkets for marijuana would dissolve as people would be able to make marijuana transactions without fear of prosecution.
ReplyDeleteThe rapidly expanding marijuana market will have a huge impact on the economy. This new industry, estimated to bring in $2.34 billion next year and beat out the smart phone market, will affect many aspects of the economy. Many entrepreneurs are interested in the cannabis markets and seek profits from the increasingly legalized industry. And a newly legalized industry means a new source of income for the government. Marijuana can be taxed to also generate millions in revenue for the federal government. Combined with the money saved from law enforcement on the prohibition of marijuana, the new taxes would make almost $14 billion. The government will also save on prison costs since people won’t need to be incarcerated for buying or selling pot and black markets will virtually disappear. However, many law enforcement officers will become unnecessary, reducing the employment due to reduced crime rates. On the upside, more demand for pot means an increased amount of places to get pot. More people can grow and sell cannabis, opening a different job market. This will also mean that the price of pot will decrease.
ReplyDeleteAs the marijuana market flourishes, our economy will be greatly affected.
ReplyDeleteTax revenue, for instance, will see an inevitable increase as the market grows. Legalizing marijuana could perhaps create an excise tax on it. Legalizing the drug may result I'm decreased work for those in law enforcement. Since a lot of their current work is based on the drug, there may be lay offs. Bad news for black market sellers: they will likely be out of a job. Conversely, the job market for those in the legitimate marijuana business would increase astronomically- growers, sellers, etc. An increase in supply, consequently, will lead to a drop in prices and increased demand. The variety would likely increase as well.
The growing marijuana market will have several implications on the economy, but good things would come from it also. The good things would be the huge amount money coming in for the state, and the release of prisoners that don't deserve to be in jail. Imagine a country where they're actually pouring REAL killers in jail, and not just some potheads. Law enforcement would get lashed off, that's certainly true, but eventually they will find another job so that's temporary. Furthermore legalizing marijuana would decrease the cost of it. Bi longer will people have to Eric and kill for drug money. Crime will decrease dramatically.
ReplyDeleteThe marijuana market, increasing quickly, will have a few implications on the economy. The amount of revenue collected from taxes will inevitably rise, as well as the possible idea of an excise tax on the drug itself. The government, ridding itself of many of the criminals in prison for illegal cannabis use, will save lots of money on the costs of keeping so many prisoners. On that note, many of those who work in law enforcement may not have jobs any more considering there will be no illegal marijuana cases to crack. Because marijuana is currently being sold at such a high price, suppliers will make tons of it as soon as they are legally allowed to do so, and the demand for marijuana will then go down, as well as the price of it.
ReplyDelete