There’s no denying it: areas which rely heavily on coal are at an economic tipping point. Employment in the coal industry peaked in the 1920s and has been in steady decline ever since, with coal production plunging to the lowest level in 35 years during 2016. Coal markets are competing with alternative and renewable energy sources and modernization, and jobs have been suffering as a result. Between 1983 and 2014, coal employment fell by 59 percent, and that desolate trend is continuing. But how does marijuana play a role in this?
Legalizing marijuana is one of the most efficient ways to trigger increased economic activity, and taxes on the sale of marijuana could fill in economic gaps. For states like West Virginia, a heavy coal state which has been decimated by both rapidly declining economic growth, fewer residents, and an opioid crisis, marijuana sales could kickstart repairs to their economy. According to projections, legalizing marijuana in West Virginia could generate as much as $194 million annually, which would effectively eliminate their state deficit and create a $183 million surplus.
If marijuana was legalized in areas such as Pennsylvania (specifically the Appalachian Mountains), Wyoming and West Virginia, they would be following in the footsteps of states that are already looking to add millions to their economy. California’s recently passed Proposition 64 is estimated to bring in 1.5 billion to the market, expanding to 3 billion by 2019 and 4 billion by 2020. These don’t include the already existing medical marijuana market, which is estimated to generate 4.27 billion in 2018 and 6.45 billion by 2020. According to the nonpartisan Legislative Analyst’s office, the market will bring in anywhere from the “high hundreds of millions of dollars to over 1 billion annually,” in addition to reduced criminal justice costs, which average around tens of millions of dollars annually. In Colorado, where it has been legal since January 2014, the marijuana market is “a stronger economic driver than 90 percent of the industries active in Colorado” and adds about 2.4 billion to the state’s economy annually.
Marijuana production doesn’t just increase revenue: it also creates jobs. In 2015, the marijuana industry in Colorado created more than 18,000 full-time jobs. The legal cannabis market is expected to create more than a quarter of a million jobs by 2020, outpacing job creation in manufacturing, utilities, and government jobs by 2020. At this point, the economy is growing at a compound annual rate of 17%.
“While we see a potential drop in total number of U.S. jobs created in 2017, as reported by Kiplinger, as well as an overall expected drop in GDP growth, the cannabis industry continues to be a positive contributing factor to growth at a time of potential decline. We expect the cannabis industry’s growth to be slowed down to some degree in the next three to five years, however with projected total market sales to exceed $24 billion by 2025, and the possibility of almost 300,000 jobs by 2020, it remains a positive economic force in the U.S.” –Giadha Aguirre De Carcer, the founder and CEO of New Frontier Data
Legalizing cannabis would create a market which could potentially be a force which revitalizes and stabilizes the economies of coal country areas that have been devastated by the continual decline in coal production and economic return. Although there are no “quick fixes” in economics, rebuilding their economies around other fields, including marijuana, could prove to be incredibly beneficial for the financial future of these areas.
Image Credit: Eskipaper
