Sarah Climaco

Report: Federally Legal U.S. Cannabis Industry Could Create 1.1M Jobs by 2025

According to a New Frontier Data report, if the U.S. government were to legalize recreational cannabis, the industry could infuse the national economy to a tune of $18.9 billion by 2025, based on a 15 percent tax rate. The report estimates that sales taxes, if implemented federally at 15 percent, could reach $51.7 billion. The revenues would be entirely new revenue for the U.S. Treasury as there are currently no federal sales or excise taxes.

The analysts estimate that federal legalization could create 782,000 jobs almost immediately and 1.1 million by 2025, which would represent $4 billion in payroll taxes in the early days of the industry, and as much as $5.9 billion by 2025.

“By combining the business tax revenues, the payroll withholdings based on the theoretical employment required to support the industry, and the 15 (percent) retail sales tax, one can calculate the total federal tax revenue potential of legalization: The combined total is estimated to be $131.8 billion. The difference between the current structure and the theoretical model is a $76.8 billion increase in federal tax revenues.” – New Frontier Data report, “Cannabis in the U.S. Economy: Jobs, Growth & Tax Revenue, 2017 Edition.”

The report notes that the report was prepared prior to the Tax Cuts and Jobs Act signed into law by President Donald Trump in December.

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