How cannabis legalization could affect the economy of South AFRICA
For a long time, there have been a debate about cannabis legalization. Cannabis industry’s total sales is approaching 8+ billion dollars from day one of its legalization. Legalizing cannabis means a big push to the South African economy. This article presents how cannabis legalization could affect the economy of South Africa.
Increase in income tax hence more revenue for the economy
With legalization of cannabis, the local economy is strengthened and the impact can go beyond exceptional, especially if legalization could be federal.
Cannabis sales went beyond 8 billion dollars from the day of legalization. This means more revenue for the country. Taxes collected from cannabis sales could make the largest part of government revenue. This is because if federal legalization is realised, more sales are likely to be made.
Cannabis industry is contributing much to the economy primarily through taxes and other fees from cannabis sales. Fees collected from cannabis sales are sourced from individuals operating without license.
Creation of employment opportunities
The setting up of cannabis dispensaries and nurseries is the first step for medical cannabis. This would set the ball rolling for economic activities in the cannabis industry. It would also create opportunities for the jobless.
With such infrastructure ready and functioning, the economic impact of cannabis can become quantifiable. Dispensaries and nurseries make work easier because it simplifies the whole process.
Federal legalization of cannabis would create many more jobs by 2025. This is because of the fast growing cannabis industry in South Africa. Labor would be needed in farming, processing, and marketing of cannabis products.
There was an increase in the number of employees in the industry by 18% from the previous year. This was because of cannabis legalization. More than 6000 job positions were created and more than 1500 business owners operate within the industry.
With legalization of cannabis in South Africa, there is possibility of greater benefits both to the local and national economies.
With cannabis remaining illegal at federal level, cannabis investors may be unable to capitalize growth of the industry. Moreover, federal legalization would create many opportunities for investors. This is because it could help in securing investment portfolio for internal and external investors.
Furthermore, federal legalization could enable businesses dealing with cannabis to list their stocks freely in the international market. This could create room for access to more investors in the industry.
Should South Africa maintain or even increase the pace of the growth of the industry, more investors are likely to show keen interest in investing in cannabis.
It is important to keep in mind the economic benefits of cannabis, including the revenue earnings as well as money that could be saved. If federal legalization could be allowed, the cost of enforcement would be reduced. This is necessary because more money need to be saved for other economic uses.
It is important to remove cannabis from the list of controlled substances completely. This is because it will considerable reduce the court cases involving substances hence more money saved for the economy.
The bottom line
There is need for federal legalization of cannabis, if more economic benefits has to be realised. Think about the benefits it has on investment opportunities, jobs, revenue earnings and lots of money that could be saved for economic growth.
If legal cannabis can be maintained, the country can surely see how cannabis legalization could affect the economy of South Africa.
With tremendous benefits of cannabis industry to the economy of South Africa, there is a real need to consider legalization at the federal level. This could the economy of South Africa to the next level.