Yahoo – AFP,
Elodie Mazein, 1 March 2016
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Already 23
out of 50 states, plus the America's capital, allow pot in some form,
whether
for medical or recreational purposes (AFP Photo/Alex Wong)
|
Washington
(AFP) - Legal marijuana is becoming more and more entrenched in the United
States each year, and 2016 looks to be no exception.
In fact,
some observers say it could be a "tipping point" for an ever-growing
industry already worth billions of dollars.
By the end
of the year, nearly a dozen states will decide whether to legalize pot -- with
seven to determine whether they will allow recreational use.
Already 23
out of 50 states, plus the nation's capital, allow pot in some form, whether
for medical or recreational purposes.
At the
beginning of 2016, 86 percent of Americans lived in a state permitting cannabis
use in some form.
As acceptance
of the drug grows across the United States, so too do sales, which are expected
to hit nearly $22 billion by 2020.
"It is
going to be a very, very competitive market in the next five years," said
John Kagia, director of industry analytics at New Frontier, a firm specializing
in the cannabis business.
While
possession, sale and consumption of marijuana remains illegal at the federal
level, it is permitted for recreational use in four US states: Alaska,
Colorado, Oregon and Washington, plus the US capital Washington.
According
to Kagia, "2016 will be the tipping point" for pot, with 11 states
slated to decide whether to allow it in one form or another.
The western
states of Colorado and Washington pioneered recreational marijuana legalization
in 2012, and sales have increased 30 percent per year on average since then in
the United States, according to New Frontier and the ArcView Group, another
firm focused on analyzing the cannabis industry.
US pot
sales climbed to $4.6 billion in 2014 and are expected to reach $21.8 billion
in 2020, New Frontier says.
The
explosion in sales is due mainly to the legalization of recreational pot in
some states. Although medical marijuana represented 92 percent of all pot sales
in 2014, its share of the total is expected to fall to 47 percent in just four
years.
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The market for
pot is in full bloom thanks to burgeoning industrial growing operations,
marijuana edibles and a higher demand for equipment from those who want to grow
--
or consume -- cannabis at home (AFP Photo/Josh Edelson)
|
Budding
entrepreneurs
The market
for pot is in full bloom thanks to burgeoning industrial growing operations,
marijuana edibles and a higher demand for equipment from those who want to grow
-- or consume -- cannabis at home.
And while
entrepreneurs see dollar signs behind every joint rolled, so too do state
governments that stand to reap massive gains in the form of taxes.
Last year,
Colorado earned some $135 million in taxes and licensing fees on nearly $1
billion in pot sales, according to The Denver Post.
The state
of Washington, meanwhile, took in $70 million on statewide pot revenue totaling
$257 million, a number that came in lower than expected after a pot shortage.
As America
falls for pot, competition has become increasingly fierce, and the variation in
regulations and taxes from state to state has given rise to some tension.
The amount
of pot a person can grow varies as well, with up to four plants allowed in
Oregon and six plants in Colorado, but none in the state of Washington.
Six plants
are allowed in the US capital Washington, where marijuana advocates celebrated
the city's one-year anniversary on Friday for legalizing pot.
But the US
Congress, which has some authority in the capital's local governance, has
prevented the city from regulating its pot market, which means buying and
selling marijuana is still illegal.
The next
president, who will be elected in November, could tip the balance in either
direction at the federal level, experts told AFP at a marijuana tradeshow
called CannaShow, held just over a week ago in Washington.
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By the end
of 2016, nearly a dozen states will decide whether to legalize pot -- with
seven to determine whether they will allow recreational use (AFP Photo/Desiree
Martin)
|
Fight
against discrimination
For those
entering the marijuana industry, the market has sparked particular worries and
uncertainties such as the fact that all payments must be made in cash since
banking services are not extended to the pot industry, the risk of
Congressional intervention or even a price war.
Moreover
growing cannabis, or "cannaculture" as it is called, is a costly
endeavor, with plants needing gallons of water and a constantly warm
environment, and thus electricity.
According
to New Frontier, cannabis is the greediest of crops in terms of electricity,
accounting for one percent of all electricity used in the US (the same amount
as 1.7 million homes) at an annual cost of $6 billion.
Electricity
accounts for up to 50 percent of the wholesale price of cannabis.
Despite
these pitfalls, pot proponents are quick to point out that legalization of the
substance has its societal virtues, such as putting an end to some
discriminatory arrests.
In the US
capital, for example, 91 percent of those arrested for marijuana-related
offenses before legalization were black.
Legalizing
marijuana also keeps down overcrowding of courts and prisons.
Retired
Baltimore police commander Neill Franklin, who is part of the advocacy group
Law Enforcement Against Prohibition, an organization of officers who speak out
against current drug policy, said that 500,000 to 600,000 people are arrested
each year for cannabis in the United States.
