- 31 января, 10:10
- Wall Street Cheat Sheet
Attorney General Jeff Sessions is no fan of marijuana, so it’s not surprising he’s erasing the Obama-era policy that allowed legal pot to flourish. There are several reasons why declaring war on legal marijuana is a bad idea, but one is very perplexing. Sessions’ boss, President Donald Trump, is a businessman, but industries are floundering during his presidency. And now the robust legal marijuana economy is threatened.
What exactly is at stake with Sessions’ renewed war on marijuana? More than your ability to go buy a joint at a dispensary. A huge segment of the economy and a plethora of jobs are at stake, too. Trump and Jeff Sessions are targeting the legal marijuana industry, which could kill billions in investment and millions of jobs. We’ll explain exactly what Sessions did first, discuss how it affects jobs and the economy, and finally let you know how states are already fighting back.
What did Jeff Sessions do?
- Proving the pen is mightier than the sword
All Jeff Sessions had to do to reignite the war on marijuana was sign a memo. Deputy Attorney General James Cole wrote a memo during the Obama presidency that basically let the states decide how to prosecute marijuana crimes. As long as pot wasn’t getting into the hands of minors, crossing state lines, being used near schools, or being sold by drug cartels, it was OK. Sessions, Donald Trump’s handpicked attorney general, rescinded the memo, and now business owners and cultivators in states with legal marijuana can be prosecuted at the federal level.
Next: Sessions’ move wipes out more than your good time.
Literally millions of jobs might be at stake
- A huge swing in jobs numbers between legal and illegal marijuana
As is his wont, Sessions is going on the offensive against marijuana. The jobs market is collateral damage. Estimates from NORML show there were 123,000 jobs in legal marijuana at the beginning of 2017. Those jobs could be in danger, but there’s even more at stake with Sessions’ decision. If the federal government instead went the other way, toward full legalization, research by New Frontier Data shows there would be 782,000 jobs created instantly and 1.1 million jobs by 2025. That’s more jobs than the Bureau of Labor Statistics predicts for utilities and mining at the same time.
Next: The job losses will accelerate another issue facing the United States.
The economy is going to suffer
- Billions of dollars will go to the black market.
In addition to having less crime, states with legal marijuana are making tons of money. Legal sales in North America reached $6.9 billion in 2016, which is good. The bad news is close to 90% of marijuana sales and hundreds of billions of dollars went to the black market at the same time. The United States won’t be the world’s No. 1 economy forever. Legal marijuana is one way to stem the tide. The Netherlands collected $520 million in tax revenue in 2008 because of its permissive marijuana laws. The United States’ and its larger population is clamoring for legal weed. By fighting a war on marijuana, the government is spending money when it could be making tons of money instead.
Next: This is the legal marijuana revenue stream everyone knows about.
Potential sales tax revenue goes up in smoke
- The government loses out on billions of dollars in sales tax.
Full marijuana legalization would provide an instant revenue stream in the form of sales tax. Assuming a 15% rate on marijuana sales nationwide, New Frontier Data estimates $51.7 billion into federal coffers from 2017 to 2025. That’s $6.4 billion per year, and it doesn’t even take into account other taxes that could be going to the government.
Next: Sessions would like the look of legal pot each April.
More jobs mean more payroll taxes
- Up to $5.9 billion could be left on the table by the war on marijuana.
Just think about the frustration you feel when you look at your paycheck and see all the taxes taken out. Now imagine that times the 1.1 million jobs that could be created because of legal marijuana. New Frontier Data estimates as much as $5.9 billion in payroll taxes would be created by an open and legal market. Considering people are already figuring out ways to game the new GOP tax plan, adding revenue from payroll taxes couldn’t hurt.
Next: Even Jeff Bezos’ fortune pales in comparison to the lost tax revenue.
The grand total is staggering
- Add up the tax revenue and you’re looking at a lot of zeros.
Amazon CEO Jeff Bezos is the richest American alive, but his fortune pales in comparison to what the U.S. could make from legal weed. Add up the sales taxes, payroll taxes, and business taxes, and you get $131.8 billion potential revenue through 2025, according to New Frontier Data estimates. It’s a lot of money being lost, and some people aren’t happy about it.
Next: Pot smokers aren’t the only ones frustrated with Sessions’ decision.
Politicians aren’t pleased with the move
- One senator openly disagrees with the revived war on marijuana.
Colorado Senator Cory Gardner isn’t very popular now, but his reaction to Sessions might change some minds. He’s threatening to block Department of Justice nominees in the Senate. He also blasted the decision on Twitter, writing, “With no prior notice to Congress, the Justice Department has trampled on the will of the voters in [Colorado] and other states.” The voters’ free will and money going to Colorado (and other legal marijuana states) is just part of the problem. In nearly every measure, legalization in Colorado is a rousing success.
Next: The battle is just beginning.
The fight is far from over
- States aren’t going to take Sessions’ decision sitting down.
The rescinding of the Cole memo by Jeff Sessions is bad for job growth, and it’s bad for the economy. Even the director of undergraduate studies in the Department of Economics at Harvard calls it terrible news. The states aren’t going to accept Sessions’ decision without a fight. Bob Ferguson, the attorney general in Washington state, is vowing to fight it, and he’s hardly alone. While Sessions is bringing uncertainty to the states with legal marijuana, it is certain those states are ready to fight back.
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