The economic impact of the Coronavirus pandemic has been immense. Shortly after various states started implementing lockdowns to prevent the virus from spreading, businesses were feeling the pinch due to reduced sales. By this week, more than 3 million Americans have filed for unemployment, and the number may increase as the country has officially become the epicenter of the disease with over 185,000 confirmed cases.
According to New York Governor Andrew Cuomo, the estimated loss of revenue for the state of New York stands between $10 and $15 million. The state is the epicenter of the outbreak in the U.S. with over 40,000 cases, and officials have already warned of severe budget issues. Most of the other states with confirmed cases are also experiencing the same. The massive closure of a majority of businesses coupled with the escalating costs of treating infected patients is sure to cause a lot of strain on the country’s economy.
However, according to analysts at DataTrek Research, legalizing recreational marijuana could help get the economy back on track after the Coronavirus runs its course. The more conventional means of increasing revenue like ramping up sales or increasing real estate taxes might not be the way to go, says DataTrek co-founder Jessica Rabe.
“Traditional means of boosting state and local government revenue, such as increasing income, sales or real estate tax will further dampen demand and possibly drive people out of states like New York. Taxing sales of retail cannabis is a new source of state and local income that’s successfully raised hundreds of millions of dollars in states like Colorado,” Rabe adds.
Last year, Colorado raked in $1.74 billion in marijuana sales, and over $300 million was injected into various state programs. In California, legal recreational marijuana has generated over $1 billion in state revenue since 2018.
“There’s a simple and effective solution for states and cities to help cover their huge budget shortfalls after the COVID-19 pandemic subsides; legalize recreational sales of marijuana,” she adds.
Experts say this won’t be a short ordeal, and that the virus may end up infecting 70% of the world’s population. And with each passing day that businesses are closed and people cannot work, the economy slips further. According to some economists, the country is just a bad day away from sliding into the Great Depression.
Legalizing recreational marijuana sales may be one of the few ways to jumpstart the economy and provide jobs without putting undue strain on the citizens.
It would be interesting to hear what marijuana industry players like ChineseInvestors.com Inc. (OTCQB: CIIX) have to say about the suggestion that cannabis could hold the key to economic recovery after the current pandemic runs its course.
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