The Economic Impact of Cannabis Tourism

A major development in the cannabis industry has been tourism. Particularly with more than half of the states in the US decriminalizing medical marijuana, many states have begun to capitalize on the public’s interest in the substance. In an article on Forbes, Nick Kovacevich goes into depth about the growing industry and how it will continue to develop in the coming years.

The preliminary example that Kovacevich uses comes from San Francisco. He begins to talk about an experience called the Gonja Goddess Getaway, which is a wellness retreat for women who already love cannabis, and those that simply want a safe space to try it for the first time. The retreat consists of yoga, educational classes, spa treatments, and of course unlimited cannabis. The retreat allows its visitors to try it in many different forms, including smoothies, creams, and even vapes. According to the co-founder, Deidra Bagdasarian,

“Cannabis attracts everyone, from lawyers to truckers,” – Deidra Bagdasarian, Co-Founder of Ganja Goddess Getaway, 2018

Ganja Goddess
A photo from the Ganja Goddess Getaway hosted in San Francisco

Bagdasarian has enjoyed the luxuries of this form of tourism, as she also created Bliss Edibles which is one of the premier cannabis companies in the United States. Her business has expanded so much that she plans to expand across the entire country and overseas in 2019. Her success, however, is not uncommon in this industry. In the Forbes article, it is said that Cannabis Tourism is growing at an incredibly fats rate and attracts thousand of people, which in turn produces millions of dollars in revenue. Kovacevich noted that in Colorado alone, this form of tourism has grown 51% since 2014, according to the states department of revenue. He went further to note that,

“The Colorado DOR said the state attracted some 6.5 million cannabis tourists in 2016, the most recent figures available. It estimates that number will have grown by at least 6% in 2017 and will match or exceed that figure this year. The report said those 6.5 million tourists logged nearly 18 million cannabis-use days in 2016, a clear demonstration of how the state racked up more than $5.2 billion in marijuana sales since it legalized cannabis in January 2014.” – Nick Kovacevich,  Forbes Contributor, 2018

Let me just emphasize these numbers again. Since 2014, just four years ago, the cannabis industry alone in Colorado has contributed $5.2 BILLION to the states economy! Colorado is the prime example because it was the catalyst for the rest of the country to follow suit. Kovacevich also notes the impact California has been monumental as well. Not only are “Wine and Weed” tours are becoming more popular, but so are “Puff and Paint” events. These states have found innovative ways to infuse cannabis use with traditional tourism, allowing for a better experience for tourists. He notes that,

“One tour company plays on the mystique of cannabis, offering tours “behind the curtain” of the legal marijuana industry in six states, along with some sampling along the way.” – Nick Kovacevich,  Forbes Contributor, 2018

Though Cannabis Tourism has produced a great deal of revenue, like the rest of the cannabis industry, it also has a banking problem. Since cannabis use is still considered illegal at the federal level, most banks refuse to do business with companies in the industry. With some states having it legalized and others refusing to do so, the legal uncertainty makes it hard for banks, and destination marketers to promote cannabis tourism. States are beginning to wake up to the potential, but there is a lot of work to be done.

According to Marijuana Business Factbook, the economic impact of legal marijuana will increase 223% from 2017 to 2022. Using the Great Experiment as an example, also called Colorado, we can assume that the more touristy the area of a certain state, the higher the cost of marijuana, which in turn generates higher sales tax revenue. In 2017, cannabis sales were higher than alcohol sales in Aspen for the first time in history. Even small towns near the border with states where cannabis use is not legalized have seen significantly higher per capita sales than interior areas of the state. This indicates that the out-of-state market of potential customers on a day-trip can be just as potent.

Even in Nevada, where cannabis use is outlawed on the Vegas Strip, people are finding a way to cash in on the industry. After marijuana revenue exceeded expectations by 25% in 2017, Nevada policy makers began to consider smoking parlors and pot lounges to draw more tourist. Kovacevich added that,

“In November [2018], a sort of cannabis theme park will open in Las Vegas, featuring laser graffiti walls, giant flying orbs, and light and water shows. And that’s before guests get to the dispensary.” – Nick Kovacevich, Forbes Contributor, 2018

In the coming years it is inevitable for us to see more cities loosen their restrictions on cannabis tourism, due to the fact that so much revenue is involved. It will be interesting to see how cities adapt around the development of the cannabis industry, and try to incorporate it into their tourism pitch. Comment which cities you would like to visit for your first Cannabis Tourism experience!

Article: The Next Big Thing In Cannabis: Tourism

The Great Experiment

While many states have legalized marijuana as of 2018, well at least medical marijuana use in most cases, Colorado was the first of its kind. The legalization of marijuana use in the state of Colorado is considered one of America’s greatest experiment to date. Though no one knew exactly what was to come from marijuana legalization, it is clear that the state has seen numerous benefits. In 2014 Colorado became the first state where marijuana, often referred to as “pot”, was made recreational. Voting numbers for the so called “Great Experiment” were unprecedented, and natives of the state have seen vast changes since its implementation. The so called “experiment” has been very beneficial for Colorado.

As of 2018, just four years after the legalization of cannabis, Colorado continues to be characterized by record low unemployment rates. As of March of 2018, according to the Bureau of Labor Statistics, Colorado has an unemployment rate of just 3%, while the national average is at 3.9%. In 2017, only three years after it’s legalization, Colorado reached a record-low unemployment rate at 2.6% in May. Multiple factors contribute to Colorado’s low level of unemployment, including the state’s business-friendly policies.

Colorado Chart
The chart from the Bureau of Labor Statistics provides the historical high and low unemployment rates for Colorado

According to Colorado’s governor, John Hickenlooper, Colorado’s very low business tax rate is one of the lowest in the country at 4.6%. Carey Wedler from the Word On Tree, another blog based on the business of cannabis, noted that Colorado’s approach to business taxes has helped create over 60,000 jobs in the clean energy sector, however it is undeniable that the cannabis industry has played a vital role in the states development. Wedler states that in 2016 alone,

“Cannabis generated $1.3 billion in profit, which yielded nearly $200 million in tax revenue that the state is using for various programs, including education, substance abuse and cannabis awareness programs for youth, and even the Attorney General’s office.” – Carey Wedler, Word on Tree, 2017

With over a billion dollars worth of business in one industry, it is inevitable that jobs would follow. In 2015 alone, just a year after the implementation of recreational cannabis, the industry created 18,000 full time jobs. The Washington Post reported that,

“These indirect impacts of marijuana legalization came from increased demand on local goods and services: growers rent warehouse space and purchase sophisticating lighting and irrigation equipment, for instance. Marijuana retailers similarly rely on other companies, like contractors, lawyers and book-keeping services, to conduct their own businesses.”

marijuana-legal-pot-sales-620The trend has not slowed down, as the industry continues to increase on jobs and revenue. In 2016, CBS posted a report that according to the Marijuana Business Daily, Colorado has more than 27,000 occupational licenses, which was up from the nearly 16,000 licenses that were held at the end of 2014. In order to compare the impact of the economy that the legalization of cannabis has versus clean energy, we can look at the number of jobs that were created. In the article on Word of Tree posted by Carey Wedler, clean energy jobs outnumber the amount of cannabis jobs by more than 35,000, the actual speed of job creation is faster with marijuana. According to the Denver Business Journal, the clean energy sector created 1,583 new jobs in 2014. In opposition, the Marijuana Business Daily reported that,

“….  In May of 2014 that less than six months after legalization, the cannabis industry had already generated between 1,000 and 2,000 new jobs — roughly the same number of jobs as clean energy created in the course of the whole year.”

These numbers really speak for themselves and have major implications for the rest of the country. Born and raised in Los Angeles, I have already seen some of these implications manifest themselves first-hand. Business Insider noted that the state of California, which legalized marijuana in November of 2016, could see major economic benefits. In the state capital region alone, there can be an increase of 20,000 potential jobs if it becomes a hub for the industry. Even though it has proven to be an economic bonus for Colorado and states that have followed suit, many remain reluctant to admit it’s impact. Even Governor Hickenlooper of Colorado initially opposed legalization, yet changed his mind once he saw positive results. He believes it is too soon to know what the downsides are of legalized marijuana, but he now remains optimistic. He even notes that the state has not seen a big spike in teenage consumption, or any consumption; it is now just through a regulated process.

Related Links:

Word on Tree : First State to Legalize Weed Has Lowest Unemployment Rate in the Country

Bureau of Labor Statistics: Eight States at Historically Low Unemployment Rates in March 2018

CBS News: Measuring Colorado’s “Great Experiment” With Marijuana