With nine in 10 Americans approving of either medicinal or recreational use, more than 20 states deeming medical or recreational sales “essential” businesses during the pandemic shutdown, and Americans using more weed than usual while they’re quarantined, advocates say the crisis will push the federal government to follow the lead of 33 states and legalize cannabis faster than it would have.
The coronavirus has changed the landscape, they say. Governments, revenue-poor after months of lockdown, have an impetus to tap a marijuana tax and expand employment opportunities. Ben Kovler, of Green Thumb Industries Inc., compared the situation with the end of Prohibition during the Great Depression.
“This is Prohibition 2.0,” said Kovler, the Chicago-based cannabis company’s chief executive officer. “It’s a time of uncertainty and high stress on the consumer side, and on the government side, there are economic issues.”
The virus altered the trajectory of cannabis stocks, too. They were languishing near record lows when stay-at-home orders began. In just the last two months, shares are up 66 percent.
Americans spent $12.4 billion on legal recreational and medical cannabis in 2019, according to Arcview Market Research and BDS Analytics, a number that is expected to climb to $16.3 billion this year, a 31 percent increase.
States’ revenue from marijuana has varied greatly, according to the Tax Policy Center, and governments have been wary of taxing too much and driving consumers to the black market.
In Nevada, Colorado, and Washington, pot taxes have brought in roughly 1 percent of each state’s own-source general revenue, while Alaska and Oregon reported levels of less than 1 percent. California has taken in about $1 billion during the first two years of legalization there. In January, Illinois reported $10 million in revenue from recreational cannabis.