The cannabis industry is seeing a windfall as companies dealing in the herb have seen nearly US$2 billion in added value since recreational cannabis sales became legal according to state law since the beginning of the year.
California, the most populous U.S. state, became Monday the largest legal market for cannabis in the world. Public reaction to the law change has been enthusiastic, with long lines and stock shortages reported at clinics already licensed and open.
Berkeley Mayor Jesse Arreguin hailed the reforms at a ceremony Monday at Berkeley Patients Group, one of the oldest dispensaries in the United States.
“I’m stoked about this historic moment, not just for Berkeley, but for the state of California,” Mayor Arreguin said at the ceremony, praising the state for “embracing this new economy.”
The cannabis market in California alone, which boasts the world's sixth-largest economy, is valued by most experts at several billion dollars annually and is expected to generate at least a US$1 billion a year in tax revenue.
According to Arcview Market Research and BDS Analytics, the legalization of adult-use sales in California will lead to the creation of nearly 99,000 cannabis industry jobs in the state by 2021, about a third of all cannabis jobs nationwide, and 146,000 jobs overall when indirect and induced effects are considered.
Meanwhile, a report released in December by the Financial Crimes Enforcement Network noted that late last January, 340 financial services providers were banking cannabis-related businesses. By the end of September, the number rose to 400.
With California and its 39.5 million residents officially joining the pack, more than one-in-five U.S. residents now live in states where recreational cannabis is legal for purchase, even though cannabis is classified as an illegal narcotic under federal law.
The long lines at dispensaries as well as the expectation that other states may end prohibition has given investors increased confidence in cannabis-related firms, whose shares skyrocketed Tuesday by up to a quarter of their prohibition-era value.
In 1996 California became the first state to legalize cannabis for medical use, and more than 30 states have since done likewise.
The previous law allowing for medicinal usage of cannabis was already quite loose, and one didn't necessarily need glaucoma or a debilitating illness to get a prescription allowing access to the various strains of indica and sativa in forms as varied as dry herbs, waxes, disposable vaporizers and edibles. The new law will thoroughly free the herb and grant people 21 or older the right to legally possess up to one once of cannabis.
Canada is set to become the second nation after Uruguay to legalize recreational cannabis by July. Massachusetts is also expected to begin selling the herb for recreational purposes in July.