Marijuana’s First Legal Year: Thousands of Jobs, Millions in Revenue

Source: Donald Miralle/Getty Images

Source: Donald Miralle/Getty Images

2014 will be remembered as the year that weed went mainstream.

For the first time in modern history, marijuana went on sale — legally — at actual retail locations in the United States. Yes, there are plenty of medical marijuana dispensaries dotting the landscape, but these were storefronts, opened legally under state law, in which of-age adults could purchase cannabis. Needless to say, it was a pretty interesting thing to witness.

As a result of Colorado and Washington’s voter-passed initiatives, an entire new industry has sprung to life right before our eyes. Again, the industry itself has been extremely limited in scope, but it had to start somewhere. Nobody quite knew what was going to happen as a result, yet both states have not crumbled at their foundations, there has not been an uptick in crime, and usage rates among the youth has not gone up.

Instead, two competing approaches to legalization have been on full display for the nation to watch. Colorado’s law embraces the free market much more so than Washington’s; it allows any adult to grow marijuana at home, and has been much more liberal in its licensing and taxation plans. Washington, on the other hand, has struggled in many respects to get their market off the ground. More burdensome taxes, regulations, and product shortages have stunted growth so far, although it is expected that the market should reach equilibrium soon.

But what about the numbers themselves? What were the results of the legal marijuana market in 2014 — its first year on the books?

Sean Azzariti, a veteran of the Iraq war, prepares to make the first legal recreational marijuana purchase in Colorado from advocate Betty Aldworth at the 3-D Denver Discrete Dispensary on January 1, 2014 in Denver, Colorado. Legalization of recreational marijuana sales in the state went into effect at 8am this morning. (Photo by Theo Stroomer/Getty Images)

Source: Theo Stroomer/Getty Images


Colorado was the first state out of the gates to officially allow legal marijuana retail sales. Beginning in January of last year, the entire country — including the federal government — watched carefully as entrepreneurs, growers, and consumers worked their way out of the black and medical markets to gravitate toward the new industry. One year later, the warnings that Colorado would become a lawless wasteland have proven to unfounded, and things are moving along just fine.

According to the Drug Policy Alliance, the available data (which accounts for 2014 through the end of October) indicates that the state has collected around $40 million in tax revenue, violent crime in Denver decreased for 11 straight months, and traffic fatalities fell. Roughly 10,000 jobs have been created as well, helping employment numbers, and the economy at large.

Source: Pool/Getty Images

Source: Pool/Getty Images


While Colorado’s hands-off approach to marijuana legalization has proved to be successful, Washington’s more heavily-regulated market has led to some challenges. Due to rather aggressive tax rates on not just consumers, but on producers, processors, and retailers, many are finding it cheaper to stick to the black market. The licensing scheme for growers has also resulted in product shortages, driving prices even higher, and making product harder to find at retail locations.

The Seattle Times reports that even though 99 retail stores have been licensed to open, far fewer actually have. In King County — home of Seattle, and the state’s highest population center — there are 14 licensed stores. There are also 322 licensed growers in the state. Retail sales kicked off in July, and so far have resulted in $64 million in sales, and $16 million in tax revenue for the state.

A protester holds up a imitation of a big joint as he takes part in a demonstration for the legalization of marijuana, in Prague on May 4, 2013. (Photo source: Michal Cizek/Getty Images)

Source: Michal Cizek/Getty Images

The 2014 midterm election and beyond

While Colorado and Washington engaged in their legalization experiments over the course of the year, the rest of the country obviously noticed that things seemed to be working out just fine. So fine, in fact, that voters from two other states decided to pass legalization measures of their own. Alaska and Oregon residents passed initiatives to institute legal marijuana markets, along with voters from Washington, D.C. Alaska and Oregon should see their industries kick off sometime in the next year or so, but it looks as though D.C. voters may end up having to deal with Congress before anything changes.

In addition to those victories for marijuana advocates, medical marijuana communities in many states were granted peace of mind at the end of the year when Congress decided it would end the federal government’s ban. Another small step, but it’s evident that the tides have clearly turned, even in the eyes of the feds.

With so much having happened for marijuana in just one year, it’s easy to get excited about what the future holds. Obviously, several more states will probably try to legalize cannabis during the 2016 election, and the federal government will need to step in and address the situation sooner rather than later. With public support trending towards favoring legalization, and so many economic incentives to keep the markets intact, it’s hard to imagine that the feds would pull the plug at this point.

2016 is looming, and may prove to be an even bigger year for marijuana than 2014. But as of right now, no year in recent memory can even come close to the one that just passed in terms of importance for the marijuana legalization movement.

More from Business Cheat Sheet: