Cannabis Industry Expected to Boost U.S. Economy by $112.4 Billion in 2024
The cannabis industry is set to significantly boost the U.S. economy, with projections indicating an economic impact of $112.4 billion in 2024, according to the newly released MJBiz Factbook. This represents a 12% increase from the previous year, showcasing the growing influence of regulated marijuana sales.
Despite a predicted slowdown in overall economic growth for 2024 due to higher unemployment and reduced inflation, the Federal Reserve is expected to lower interest rates by mid-2024. This adjustment should pave the way for economic recovery in 2025, potentially increasing consumer spending on cannabis and other goods.
Cannabis continues to be a bright spot in the economy, even as some established markets like California experienced declines. For instance, licensed retailers in California reported taxable sales of over $5.1 billion in 2023, a 4.7% decrease from 2022 according to the California Department of Tax and Fee Administration. However, new recreational and medical marijuana markets in states such as Maryland, Missouri, and New York are driving growth.
The MJBiz Factbook’s projection of $112.4 billion in economic impact is derived from a comprehensive analysis of comparable industries, using an economic multiplier to estimate the broader effects of recreational and medical marijuana sales. This multiplier suggests that for every dollar spent in cannabis stores and dispensaries, an additional $2.50 is generated in the economy, benefiting local communities.
The term “economic impact” encompasses the overall effect of an industry on the economy, including growth, employment, wages, and broader economic activity. It includes direct impacts (business spending and salaries), indirect impacts (economic activity from suppliers meeting new demands), and induced impacts (local spending by employees).
Total U.S. sales for adult-use and medical cannabis are projected to reach $32.1 billion in 2024 and are expected to climb to $58 billion by 2030. However, these figures do not account for potential federal actions such as rescheduling or legalization, which could further enhance the industry’s economic impact.
While President Biden has indicated support for rescheduling cannabis and expunging convictions, significant federal changes have yet to occur. Former President Donald Trump’s stance on cannabis has fluctuated, reflecting his attempts to align with conservative voters.
The cannabis industry’s economic influence spans agricultural, manufacturing, and retail sectors, as well as ancillary businesses like lighting suppliers and cannabis-friendly accounting firms. Events and hospitality businesses that cater to the cannabis community also contribute to this economic impact, fostering local economic growth and community engagement.
As the cannabis industry continues to navigate complex state regulations and federal illegality, its economic contributions remain substantial and growing. The MJBiz Factbook’s projections highlight the industry’s potential to drive significant economic benefits across the United States.
