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Marijuana industry expected to add $92 billion to US economy in 2021

Marijuana industry expected to add $92 billion to US economy in 2021

Marijuana revenue is expected to surpass $90 billion in 2021

From jobs to tax revenue to commercial real estate, the marijuana industry has a large – and growing – impact on the broader economy in the United States.

The total U.S. economic impact from marijuana sales in 2021 is expected to reach $92 billion – up more than 30% from last year – and upwards of $160 billion in 2025, according to analysis from the newly published MJBizFactbook.

To measure the industry’s economic impact, MJBizDaily analyzed similar industries and applied a standard multiplier of 3.5 on projected recreational and medical marijuana retail sales.

The numbers are a best guess because the marijuana industry’s structure is somewhat unique because it encompasses agricultural, manufacturing and retail activity.

The economic impact of the marijuana industry is not the same as supply-chain revenues that are often used to estimate the “total size” of an industry.

Rather, the economic multiplier paints a picture of the impact the industry has on the broader economy.

In this case, for every $1 consumers and patients spend at retail locations, an additional $2.50 will be injected into the economy, much of it at the local level.

That impact comes directly from the day-to-day needs of workers in the cannabis industry, including spending on life’s necessities such as housing, transportation, entertainment and more.

Marijuana businesses, consumers and patients also pay hundreds of millions of dollars in state and local taxes that are used to fund state and local government activities, including schools and roads.

In addition, real estate receives a boost from new retail, manufacturing and agricultural businesses moving into an area or established companies expanding, increasing broader demand for commercial properties.

Cultivating and manufacturing marijuana can require large investments in equipment and technology that boost not only the local economy but also areas throughout the U.S.

The list goes on.

Using the same multiplier methodology can also offer insight into the local-dollar impact from sales of recreational and/or medical marijuana.

The economic impact will vary by state based on the size, maturity and type of market.

For example, as the largest market in the U.S., California’s marijuana industry is expected to pump close to $20 billion into the state’s economy in 2021.

No other state comes close to that amount.

But states such as Colorado, Illinois, Oregon and Washington will provide more than $10 billion each for their local economies in the coming years.

Expect the same for markets in densely populated states such as New Jersey and New York as they develop.

If we consider total population, some states benefit more than others.

Ann Arbor dispensary to open Michigan’s first cannabis consumption lounge

Ann Arbor dispensary to open Michigan’s first cannabis consumption lounge

Michigan cannabis consumption lounge approved in Ann Arbor
An Ann Arbor dispensary is venturing into recreational cannabis’ next frontier: consumption lounges.

According to WXYZ 7 Action News, Holistic Industries, which operates Liberty Provisioning Center, have announced plans to open a cannabis consumption lounge adjacent to the dispensary at 338 S. Ashley Street.

“We’re thrilled to bring Michigan’s first cannabis consumption lounge to Ann Arbor and create a one-of-a-kind experience for the many people in Ann Arbor who agree that life is better with cannabis,” a spokesperson shared with WXYZ. “By providing a safe, designated space for consumption, we are helping remove some of the potential roadblocks cannabis patients and customers face after they purchase products and want to consume them.”

Liberty Provisioning Center opened last summer and services recreational clients and medical marijuana patients. Despite 2018’s legalization of recreational weed in Michigan, neighboring businesses are concerned that a consumption lounge — which is exactly as it sounds like: a commercial space where adults are legally allowed to consume cannabis on-site — could pose a threat to the community.

Sherry Doughty, who operates a Montessori school just a few hundred feet from the proposed site of the consumption lounge, is among those community members who remain skeptical.

“We don’t want them using the playground as a place to party,” Doughty told WXYZ. “If people will be milling around outdoors and if that will impact our staff and our children.” A local therapist who operates his business out of a house close to the dispensary and the yet-to-open lounge is also wary even though he supports legal cannabis.

“I don’t want a bunch of potheads walking around acting like a bunch of fools, would you?” Ken Land said. “If they get out of line, I’ll get crabby. But if they don’t, live and let live.”

Illinois Cannabis Sales Smash Records, Surpass Alcohol

Illinois Cannabis Sales Smash Records, Surpass Alcohol

Illinois cannabis sales surpass alcohol

Legalized cannabis sales in Illinois continue to smash all sorts of records, with the state now exceeding $1 billion in recreational weed sales and setting a new record for sales in the month of April.

According to the latest data available from the state’s Department of Revenue, Illinois recorded nearly $115 million in sales in the month of April alone, the highest-grossing month since cannabis became legal last year.

By comparison, the state saw $37 million in sales during the month of April in 2020.

In all, Illinois has now racked up $1,064,750,968 in recreational cannabis sales since legalization took place. Of those sales, nearly $777 million were made to in-state residents, according to the Department of Revenue.

The state also set another remarkable record in the first quarter of 2021, with tax revenues for cannabis sales ($86 million) exceeding those of liquor ($72 million) for the first time ever, according to Newsweek.

If current trends continue, the state is expected to surpass $1 billion in sales during 2021, according to officials.

Las Vegas Braces for Cannabis Consumption Lounges

Las Vegas Braces for Cannabis Consumption Lounges

Las Vegas cannabis lounges

Cannabis lounges, where patrons can smoke a joint, rip a bong, vaporize a dab or do just about anything else you can think of with the plant, appeared to be a certainty as part of a Las Vegas ordinance back in 2017—and then again in 2019. They’ve been talked about for over four years in the entertainment capital of America.

But this time around, after years of setbacks and political meddling from the rival gaming industry, a bill at the Nevada State Legislature is on track to settle the score once and for all.

Assembly Bill 341 would pave the way for an unlimited number of lounges to open across the state, in counties where local governments allow cannabis businesses to operate. That includes in Sin City, where over 40 million tourists visited each year before the COVID-19 pandemic.

“This would really open the floodgates for something marijuana users have wanted for a long time,” said Assemblyman Steve Yeager, a Democrat from Las Vegas who sponsored the bill. “And there’s a social equity part to it where we’re not restricting this just to licensed dispensary owners.”

Yeager, in his third term at the state’s biennial legislature, has felt the frustration himself. Long considered the heir apparent to former State Sen. Tick Segerblom, who was known as Nevada’s “Godfather of Marijuana,” Yeager watched as the fledgling industry offered all of its spoils to a tiny group of anointed business owners, most of whom were lawyers, doctors, casino operators, lobbyists and former public officials.

Less than 100 groups control almost all of the industry, as the state capped dispensary licenses from the adult-use program’s inception in 2017.  Many of the companies are also vertically integrated, meaning dispensary owners also hold the lion’s share of production and cultivation permits. Disproportionately left out have been women and racial minorities, the latter group of which was most harmed by cannabis prohibition.

The new bill runs so contrary to the state’s years of meticulously restricting licenses and hand-picking operators that many dispensary owners are wondering if opening a lounge is even worth the investment.

“You have to figure out if you can make any money with them,” said David Goldwater, owner of Inyo, a dispensary located just over a mile from the Las Vegas Strip. “There’s going to be a ton of new competition.”

Is Delta-8 THC Legal? A hemp industry grey area

Is Delta-8 THC Legal? A hemp industry grey area

Does delta-8 THC get you high?

Delta-8 THC is the latest cannabinoid to take over the hemp “grey” market, after CBD had its run in 2019 and 2020 before regulation on CBD products began. However D8 THC is likely to face a similar fate soon enough, and some states aren’t waiting around for the FDA to start regulating it.

So how does a hot new cannabinoid like this come about without regulation, and is Delta-8 THC legal?

What is Delta-8 THC?

What may be a surprise to some is that D8 THC is not a newly discovered cannabinoid. Pharmacological knowledge of D8 THC has been around since 1941 when its partial synthesis was discovered by Roger Adams. It is an isomer of Delta-9 THC, meaning that it has an identical molecular formula to Delta-9 THC, but Delta-8 THC is arranged differently which creates a variation in chemical properties.

But like many other cannabinoids including Delta-9 THC, scientific data surrounding Delta-8 THC was suppressed soon after its discovery, with the Marihuana Tax Act already being in effect since 1937. That changed with the passing of the Farm Bill in 2018.

Following the federal legalization of hemp, a lot of farmers hopped on the CBD trend and saturated the market with biomass. But just like CBD, Delta-8 THC can also be extracted.

D8 THC is not as prevalent in hemp as CBD, and not as potent as Delta-9 THC. But that hasn’t stopped producers and consumers from capitalizing.

More money, more effects

If Delta-8 THC was all made up by illicit market producers trying to take advantage of the uneducated consumer, it surely wouldn’t be as popular as it has become. That is to say in the mind of consumers, D8 THC is a “legal” replacement for Delta-9 THC.

For someone living in a state with no access to medical or recreational cannabis, hemp is more than likely legal. Since Delta-8 can be extracted from hemp, and hemp is legal, Delta-8 is technically legal too, for now.

With the CBD market completely oversaturated, D8 THC also presents a unique opportunity for hemp producers to still make a profit off their hemp. Being a very close relative of Delta-9 THC, a massive market for those trying to get the “high” of Delta-9 without breaking the law in their state has been created.

Just since the beginning of 2021, Delta-8 THC has grown massively in popularity. It has become available in vape carts and edibles in head shops across the country and also gives consumers the option to have it shipped right to their door online.

However that may all be changing quicker than consumers and producers hoped.

States start taking action

While the FDA might just be catching wind of Delta-8 THC and are considering looking into the new hot cannabinoid, individual states have already taken notice, and they aren’t waiting to take action.

Vermont is the latest state to pass rulings that state D8 THC is now illegal, and they aren’t alone either. Alaska, Arizona, Arkansas, Colorado, Delaware, Kentucky, Idaho, Iowa, Mississippi, Montana, Rhode Island, and Utah have all banned the sale of Delta-8 THC.

With so many states jumping to ban D8 THC so quickly, it isn’t a good sign for the future. Ultimately the reason that Delta-8 may fail is because of the lack of regulation. Without regulation, there will always be bad actors in the industry pushing fake and dangerous products.

A clear example of this issue gained nationwide attention in 2019 after several people died from ingesting illicit market Delta-9 vape cartridges, and hundreds more wound up in the hospital. The same problem could easily plague the rising Delta-8 industry, and that has lawmakers and consumers concerned.

While many are willing to take the risk and have Delta-8 THC delivered from an online service without knowing the true contents or lab results of the product, just as many are not. While there are a handful of reliable Delta-8 suppliers with lab testing provided, there are just as many if not more that don’t include lab results.

So what’s the solution?

Regulate Delta-8 THC or make it illegal

The question that many are asking right now is, will Delta-8 THC be regulated or just made illegal?

Unfortunately for consumers and producers, the latter is much more likely. Compared to CBD which has very little to no psychoactive effects, Delta-8 is described as a more subtle version of Delta-9 THC by consumers.

In a state like Utah where recreational cannabis is still illegal, Delta-8 is no different than Delta-9 in the eyes of legislators and regulators because the consumer can still get high from consuming it. So why would they allow one and not the other?

At least we can’t argue that they aren’t being consistent.

As for the potential for regulation, it is possible but unlikely in the near future. For example, despite being legalized in 2018, the USDA’s final ruling regarding hemp production wasn’t released until January of this year. The FDA has only recently begun cracking down on the unregulated CBD industry, sending out multiple emails to producers in March of this year warning about false advertising and making medical claims about CBD products.

But the USDA ruling doesn’t even address Delta-8 THC, let alone set a limit on its production. There is no evidence that the FDA is currently investigating Delta-8 either. So while we don’t expect there to be a federal ban on Delta-8 in the near future, we are likely to see more states take action on their own.

Colorado passed medical and recreational cannabis and has a thriving legal industry, yet is still choosing to keep Delta-8 THC illegal. Other states are going to take notice, and many may follow suit.

For now, if you want to try Delta-8 for yourself, make sure to search for a verified producer that provides detailed lab results from a certified lab. While the science may still be out on the safety of D8 THC itself, as long as the product is made properly with clean ingredients and certified by test results it may be the best alternative to Delta-9 for those who can’t get it for the meantime.

Vermont Joins List of States to Ban Delta-8 THC

Vermont Joins List of States to Ban Delta-8 THC

Delta 8 THC banned in Vermont
Vermont regulators have officially categorized hemp-based Delta-8 THC products as illegal under state law.

The Vermont Agency of Agriculture, Farms, and Markets (AAFM) informed all registered hemp cultivators that Delta-8 THC products are not regarded as legal hemp products in an email sent out last Friday, April 23.

With this statute, Vermont joins 12 other states that have categorized the manufacturing and sale of Delta-8 THC products as illegal under state law; Delta-8 THC has also been banned in Alaska, Arizona, Arkansas, Colorado, Delaware, Kentucky, Idaho, Iowa, Mississippi, Montana, Rhode Island, and Utah.

On their website, Vermont AAFM clarifies the state’s position further by acknowledging that hemp plants naturally produce Delta-8 THC in trace amounts. However, products with intoxicating levels of the cannabinoid are created using isomerization, which synthetically converts CBD to THC.

The Vermont Hemp Rules state that, “A processor shall not use synthetic cannabinoids in the production of any hemp product or hemp-infused product” (6.3). With this rule, the manufacturing, labeling, or sale of any Delta-8 product in the state of Vermont would violate state law. As such, anyone who distributes, uses, or possesses one of these products may face criminal penalties in the state.

Many CBD retailers have seen great financial gains due to the recent proliferation of Delta-8 throughout the states. This clarification may heavily impact their newfound revenues.

Meanwhile, the hemp industry in Alabama recently praised lawmakers there after they pulled an amendment proposal that would have categorized Delta-8 THC and Delta-10 THC as controlled substances.

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