“4/20”. If you don’t already know what that means, you will very soon. Not just because we’re about to tell you, but because it represents an inflection point. That numerical symbol is the unofficial holiday for celebrating marijuana on April 20th of each year. We’ll provide a link at the end of this note with a story on where it comes from, but the greater point is what started out as a niche insider event has grown into a popular cultural phenomenon where people from all over the world celebrate cannabis.
Tomorrow, 15,000 people are expected to gather at Hippie Hill in San Francisco, the first 4/20 annual event in California since recreational sales became legal in January. It will have DJs and live music performances, and a “bud drop” at 4:20pm, similar to the ball drop in Times Square on New Year’s. That’s just one example in one city, and even Lyft is offering up to $4.20 off rides for users celebrating the holiday in places where it’s legal, such as in Denver and Las Vegas.
We’ve been covering the legal marijuana industry for the past few years because it is the most unique cast study of its kind since the US prohibition of alcohol. We also believe it is one of the most important social trends of our time that will have gone from taboo to mainstream quicker than many think. Since 2012, 9 states and DC have legalized recreational use, and about two-thirds of Americans live in a state where at least some form of marijuana is legal. This adoption has provided many states as test beds for people to view and understand what legalizing medical/retail marijuana looks like, which has helped shape usage and public opinion.
Therefore, we want to put some stats around why we think marijuana is at an inflection point in American society. Consider these points:
#1 American Usage
- 24 million people were current users (past month) of marijuana in 2016, representing 8.9% of the population aged 12 or older compared to just 6.9% in 2010 or 6.0% in 2005. The percentage of current marijuana users in 2016 was higher than all the percentages from 2002 to 2015 largely due to an increase in use by adults aged 26 and older. For example, 7.2% of adults aged 26 or older (15.2 million adults) were current users of marijuana in 2016, versus 4.8% in 2010 and 4.1% in 2005. (Source: National Survey on Drug Use and Health).
- A newer survey from Yahoo News and Marist College from last year found that over half of American adults (52%) have tried marijuana at least once in their lives. Almost 55 million (22% of American adults) have also used marijuana at least once or twice in the past year, half (54%) of which were parents and half (52%) of which were millennials. Nearly 35 million (14%) use marijuana at least once or twice a month. To put these numbers in perspective, just under 38 million US adults currently smoke cigarettes as of 2016 according to the CDC.
- In another survey (dated July 2017), one in eight US adults told Gallup they smoke marijuana, a usage rate which has almost doubled since 2013. Forty-five percent of Americans also said they have tried marijuana at least once, marking a new high since Gallup started tracking the question in 1969.
Our take: Not only does marijuana usage continue to grow, but even though it is most prevalent among millennials it is also used among older cohorts, even parents. We regularly survey dispensaries in states where it is legal and they continually report customers from all age groups and backgrounds. Some also say that older adults were open to trying marijuana again or for the first after their state legalized the drug recreationally.
#2 Public Support
- The majority of Americans (64%) favor legalizing marijuana (as of October 2017), the highest level of support since Gallup began asking the question in 1969 when just 12% supported legalization. A majority of Americans started supporting marijuana legalization in 2013 – a year before recreational cannabis sales in Colorado and Washington – which continues to grow.
- A majority of Democrats started supporting marijuana legalization in 2009, followed by independents in 2010; 72% of the former and 67% of the latter currently think it should be legal. For the first time, a majority of Republicans (51%) said they’re in favor of legalizing marijuana last year.
Even Former Speaker of the House John Boehner has come around on the issue after staunchly opposing it. He told Bloomberg that his, like many Americans’, attitudes have changed over the past 10 years and that other “members will see the light”. He recently joined the advisory board of Acreage Holdings, which cultivates, processes and dispenses marijuana in 11 states.
- The Marist survey broke down legalization support by medical versus retail marijuana, which showed 83% of Americans support the former, while 49% support the latter. Those that have used marijuana are much more supportive of recreational cannabis legalization, including 70% who have tried the drug and 89% who use it.
Our take: Public support for legalizing marijuana continues to increase and we only see that growing as more states legalize retail cannabis. Even a majority of Republicans, who have traditionally opposed legalizing the drug, are now okay with it after a few years of retail sales in some US states. Americans are more supportive of legalizing marijuana for medical purposes, but the more states legalize the drug recreationally and the more people try it, the greater the chances they will be in favor of total legalization.
“We should legalize cannabis in all 50 states, use the taxes to repair roads & highways & call it operation pothole”. @Bill Murray
We saw this Instagram post a few months ago, and while clever and funny, it gets to the root of what will really push marijuana legalization efforts over the edge. Just this week we discussed the dire state of US budgets, and the same goes for states. Allowing cannabis retail sales could help immensely, as a few states have already shown.
States with the largest marijuana markets are bringing in serious tax revenue, even outpacing alcohol. For example:
- Colorado received $211 million dollars in marijuana tax revenue and license fees in its fiscal year 2017 compared to just under $46 million from alcohol.
- The state of Washington received $319 million from legal marijuana taxes and license fees in its fiscal year 2017, up $130 million from the year before and $113 million more than what it received from liquor taxes and license fees.
- Earlier this year, California Governor Jerry Brown estimated that his state could bring in $643 million from excise taxes on marijuana during its first full year of legalization in 2018.
- Moreover, the new governor of New Jersey Phil Murphy wants a bill to legalize marijuana passed this year as he believes it would act as a tailwind for the state’s economy and tax revenue. He thinks New Jersey could reap a conservative estimate of $60 million in tax revenue during retail marijuana’s first year of sales after looking at the experiences of Colorado, Washington, Oregon and Nevada where it is already legal. Anything helps as the governor is trying to raise $1.5 billion in new tax revenue for his proposed $37.4 billion budget.
Bottom line, the recipe is simple: more Americans are using marijuana, the majority of the public supports legalization, and states need the tax revenue.
Sources: 4/20 Origin Story, 2016 National Survey on Drug Use and Health, Yahoo/Marist Poll Results, Gallup Poll About Legalization, Gallup Marijuana Usage, Washington Marijuana Taxes, Colorado Tax Report, Bloomberg Interview with Boehner