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20 Nov 2018

Cannabis in the CV: As the One-Year Anniversary of Marijuana Legalization Approaches, the Valley Is Just Starting to Reap the Economic Benefits

Written by  Robin Goins

After California’s legalization of cannabis in January 2018, many people in the Coachella Valley noticed the start of a “Green Rush” of business—and have questions about how it will affect the economics in the valley.

Since this is a new industry in the state, that question can be answered, at least in part, by examining the outcomes in states that already have a history of legalized cannabis, such as Colorado. There is a great deal of data that can be gathered from that state showing the Coachella Valley may be on its way to—pardon the pun—much greener pastures.

In March, The Denver Post reported the results of a landmark study done by Colorado State University-Pueblo in Pueblo County, which found that legalized marijuana had an unprecedented impact on the economy. It found that the cannabis industry contributed $58 million to the local economy of Pueblo County alone in 2016. Once the costs of the industry were deducted—such as additional law enforcement and social services—the county still netted a $35 million economic benefit.

Other positive outcomes have included an increase in jobs, home values and philanthropic contributions, such as school scholarships and other community investments. A September 2017 article in Denver newspaper Westword reported on a study by the University of Wisconsin-Madison showing that the average property value for homes within a tenth of a mile of a dispensary increased by $27,000 after legalization. Westword reported that the study “also identified some underlying factors that may have increased property values in vicinities closest to dispensaries, including lower crime rates, additional amenities nearby and a surge in housing demand because of Denver's growing marijuana sector.” The study concluded that the industry had created 23,407 full time jobs in the state by January 2017.

In other words … so far, so good on the economic front. However, newly legal marijuana brings with it more than just business. In 2016, Andrew Freedman, then Colorado’s director of marijuana coordination—often called the state’s “marijuana czar”—told High Times: “At the end of the day, the debate shouldn’t be about tax revenue. ‘Should we lock up fewer people for marijuana?’ vs. ‘Is this going to create more of a burden on public safety?’—that’s where the debate should be.”

Fortunately, the news thus far is good regarding public safety, too. I have seen no data that suggests legalization had any impact on homeless rates or marijuana use among youth—two frequent concerns in communities when marijuana is first legalized—and some peer-reviewed studies show legal marijuana actually decreases crime. A 2017 study published in The Economic Journal concluded: “We show that the introduction of medical marijuana laws leads to a decrease in violent crime in states that border Mexico. The reduction in crime is strongest for counties close to the border … and for crimes that relate to drug trafficking. In addition, we find that MMLs in inland states lead to a reduction in crime in the nearest border state. Our results are consistent with the theory that decriminalization of the production and distribution of marijuana leads to a reduction in violent crime in markets that are traditionally controlled by Mexican drug trafficking organizations.”

So … what does all of this mean for the Coachella Valley, as more and more cities began allowing dispensaries and other businesses? The overall outlook is excellent as the one-year anniversary of state legalization approaches. Yes, challenges remain as local governments continue to grapple with what they will allow; however, the economic impact cannot be denied: There’s no doubt there are great financial gains to be had throughout the valley as we go green.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

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