A Rundown Of The Legal Cannabis Market In The U.S.

Until 2012, the United States was in a constant upstream legal battle over whether or not to legalize recreational use of marijuana.

But that all changed at the end of 2012 when Washington and Colorado became the first two states to fully embrace an untapped industry—they became the first in the country to legalize marijuana.

This was all huge news, from both a historical and business perspective. In only one year, Colorado’s legal marijuana industry became a billion dollar entity on its own and created almost 20,000 jobs! And that’s not even mentioning how much the sales and taxing of cannabis have earned the state. The possibilities for a greener future are finally real—in more ways than one!

The future of ganja in the U.S. looks promising, as those who are pro-pot seem to be surprisingly business-minded. Who would have thought that laziness and marijuana don’t necessarily go hand-in-hand?

A Quick History of Legal Herb

The majority of Americans are pro-pot. And they have been for some time.

In the last five years, legal cannabis has more than taken off in the United States. The figures in the following rough timeline speak volumes:

  • Drug charges accounted for 4 percent of total federal crime from 2001-2010, and marijuana-related offenses accounted for 52 percent of these arrests.
  • While drug crimes are still among the most common, they’ve dropped to 8 percent of total crime in 2015.
  • Since 2012, eight states, including Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Washington, and the District of Columbia, have all legalized the use of marijuana on a recreational level. 13 additional states have decriminalized cannabis use.
  • Currently, 45 out of the 50 states have some form of pro-cannabis legislation in place.
  • Last year, the total market value for marijuana in the U.S. broke the $4 billion mark—that number is expected to grow to almost $20 billion in the next five years.

Image via NORML: the majority of the states in the U.S. are pro-cannabis.

The entire West Coast now stands together on their stance on cannabis. There’s no need to feel anxious or paranoid this year if you plan to partake before Coachella, smoke a joint before Oregon’s annual UFO festival, or plan a stoney trip to the Space Needle in Seattle!

As the success of states dipping their toes in the world of legal pot progress to the deep end, more states are expected to follow the rising trend of legalization.

Decriminalization vs. Legalization

The terms decriminalization and legalization are certainly buzzworthy terms. While they are similar in meaning, it’s important to understand the nuances and differences between these two foundational words.

Legalization means that the act or substance in question has been deemed lawful. Therefore it is legal to do. However, that doesn’t mean that something that’s been legalized is always legal. For example, smoking cigarettes is legal but you couldn’t spark one up in a library without turning some heads. The same thing goes for drinking and driving and public intoxication. The list goes on and on.

In terms of legalized marijuana, authorities still have quite a bit of control of what’s considered legal. They can still moderate how much a person is allowed to have on them at one time, who grows and distributes the product, and for what purposes cannabis is grown (medically or recreationally).

When someone refers to a state as decriminalized, it means that the act or substance is technically still illegal but not heavily criminalized. Essentially, if you’re caught with marijuana in a decriminalized place, you likely won’t be arrested, and you’ll likely be cited much less than most places for having pot, if at all. It’s more of a “slap on the wrist” approach, rather than a heavily criminalized mindset.

A major distinguishing factor, besides the legal issues at stake, is the fact that legalized pot can be taxed and decriminalized cannot. This equates to more “under that table” marijuana activity in decriminalized regions, and the potential for an immense amount of tax revenue for states that have chosen to legalize.

The Market Outlook

The modern cannabis market, also being called the “green rush,” is absolutely flourishing. And it doesn’t show any signs of slowing down.

Every year since 2012, dispensaries have been shattering sales projections, and last year was no exception:

The taxing of legal marijuana is also fantastic for the states that have chosen to allow “green gold”:

  • In 2015 alone, Colorado collected $113 million in retail marijuana tax revenue, and Washington collected just under $77 million in taxes for retail earnings.
  • A resource on Tax Foundation points out that: “If all states legalized and taxed marijuana, states could collectively expect to raise between $5 billion and $18 billion per year.”

These taxes are used similarly to other sin taxes. Tax spendings are decided by individual states, but typically go towards things like funding schools and state police departments, helping specific city economies in need, and to mental health and alcoholism/drug rehab services.

Experts predict that all of these numbers will continue to grow. The cannabis industry is expected to be worth upwards of $50 billion in the next decade.


A major hurdle for many people to jump, in terms of putting an end to cannabis prohibition, is the fact that driving under the influence is still a bit of a grey area.

If you’re driving drunk and get pulled over, a simple field sobriety test or quick blow into a breathalyzer determines the fate of the inebriated and driving. But what about pot?

Currently, there aren’t any widespread, field sobriety tests for marijuana. Or at least, they aren’t being enforced. Some tools are claiming the ability to measure impairment levels, “by determining the amount of THC in the range of 0 to 50 nanograms per milliliter of saliva.”

This poses a question for many: What are the actual risks of driving after smoking? How likely is a person to get in an accident if they have used marijuana before driving?

According to one DUI study conducted in 2012:

“Drivers with active THC in their system were approximately 2.66 times more likely to get into a crash than a drug-free driver. But when NHTSA researchers factored in the drivers’ ages and genders and assessed whether the driver also had alcohol in their system, there was no across-the-board increased crash risk.”

Compare that to the figures for drunk drivers: which account for about a third (31 percent) of the total traffic-related deaths in the U.S.

With all of the legal battles that have taken place in the last several years, many question whether or not an ultra-Conservative President Trump will be putting an end to legal pot in the U.S.

However, a recent Time article gives seven clear reasons why this is highly unlikely: after all, he is a businessperson at the end of the day.

While the lines of decriminalizing and legalizing cannabis are still a bit blurry, it’s certain that there is a huge market for this ‘green gold.’ It’s clear that the majority of the U.S. wants legal marijuana—the numbers and maps paint a vivid picture of this. But how long will it take until every state has at the very least legalized medical marijuana? How long will it be until buying a joint at a gas station is as common as buying a six-pack of beer.

Please post your insight and predictions in the comments section!


Robert Parmer
Robert Parmer
ROBERT Parmer is a student of Boise State University, ex-chef and barista, and adamant writer. He stepped away from the kitchen life three years ago to pursue freelance writing endeavors, and enjoys writing about business, health/wellness, and cats.

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