History of Marijuana Laws in the United States
Marijuana was first prohibited in the United States in the early 20th century. In 1937, the Marijuana Tax Act made possession or transfer of cannabis federally illegal across the nation. For decades following, marijuana was classified as a Schedule I drug under the Controlled Substances Act of 1970, meaning it was considered to have no accepted medical use and a high potential for abuse. However, views on the drug began changing in the late 20th century as more research emerged on its medicinal properties.
The Rise of Legal Medical Marijuana
In 1996, California became the first state to Legal Marijuana through Proposition 215, the Compassionate Use Act. This allowed cannabis to be recommended by doctors for treating illnesses like cancer, HIV/AIDS, chronic pain, seizures and more. Since then, an additional 33 states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands have enacted similar laws legalizing medical cannabis in some form. In these states, patients with qualifying conditions can access marijuana from licensed dispensaries or grow their own with a doctor’s recommendation. Currently, over 50% of Americans now live in jurisdictions where medical marijuana is legal.
Recreational Legalization in Some States
Colorado and Washington made history in 2012 by becoming the first states to legalize recreational marijuana for adults over 21 through ballot initiatives. Since then, sixteen additional states and Washington D.C. have passed legislation permitting adult-use, non-medical cannabis. This includes states like Oregon, California, Massachusetts and Michigan. In these places, cannabis retail stores operate similarly to liquor stores, allowing anyone of legal age to purchase a limited amount of marijuana per purchase for personal enjoyment. States have established regulations around cultivation, product safety testing, advertising and taxation of sales.
Challenges of an Emerging Market
While public opinion and state policies have shifted dramatically on marijuana legalization in recent years, it remains prohibited at the federal level in the U.S. under the Controlled Substances Act. This creates legal conflicts and uncertainty for the industry as it develops. Banks have been hesitant to work with cannabis companies due to its federal illegality. Businesses also face obstacles with interstate commerce, investing and establishing credit. States have developed extensive rules around issues like seed-to-sale tracking systems and limits on home cultivation to prevent diversion to the illegal market. Product safety testing and labeling are also priorities to ensure consumer protection as more people are exposed to THC and CBD concentrations.
Economic Impact and Tax Revenue
Despite challenges, the legal cannabis market has grown rapidly where allowed. In 2015, legal marijuana sales totaled an estimated $5.7 billion and grew to over $8 billion in 2016. A report from ArcView Market Research and BDS Analytics projected the legal cannabis industry would reach $20.2 billion in sales by 2021. Individual states have also benefited greatly from tax revenue generated by marijuana businesses. Colorado, for example, collected over $200 million in cannabis tax revenue in 2016 alone according to the state department of revenue. Much of the money goes towards public programs like education, healthcare and infrastructure. As more states legalize, the economic impact of this emerging industry will continue expanding dramatically.
Public Opinion Growing in Favor of Legalization
Cannabis legalization as a whole enjoys increasing support across all demographics according to Gallup polls. In 2020, 68% of Americans favored legalizing marijuana – the highest level of approval yet. Even a majority of Republicans now support legalization according to some surveys. Generational shifts in attitudes play a big role, with over 90% of millennials backing legal cannabis. Acceptance has risen partly due to liberalization of laws in many states and more research demonstrating medical benefits of components like CBD and THC. However, full federal legalization still faces challenges as different perspectives remain on issues like drug abuse and public safety. Continuing shifts in public opinion will likely impact long-term pathways to reform at both the state and national level over time.
As of 2021, the legal marijuana market is continuing to expand across the country and worldwide as more governments liberalize cannabis laws. New medical cannabis programs are emerging in places like Canada, Germany and Mexico. The U.S. market alone is projected to reach $30 billion in annual sales by 2025. However, federal prohibition is still a major barrier to mainstream commercial development. The industry hopes forthcoming regulations or possible decriminalization could resolve conflicts between state and federal jurisdiction to further spur business growth. Overall, while challenges remain, marijuana legalization has gone from a fringe issue to a mainstream topic of debate. The future appears to hold much change as both policy and public opinion continue evolving on cannabis in America.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it