With 21 licenses for legalized medical marijuana dispensaries having been submitted, the process towards legitimization is moving hurriedly.
Puerto Rico’s lawmakers are penning the details which started in January. The goal is to have things in place early next year, so the steps towards legalization are finalized.
The question now is, will legalizing marijuana (medical and recreational) bolster the economy? Will it give it the boost it requires?
Let’s take a look at this in detail.
History Of Marijuana In Puerto Rico
Before looking at the financial implications of this decision, it’s important to assess how marijuana has got to this point in Puerto Rico. In the past, it was illegal, and all trading was punished by the state. It was a large concern for local authorities to manage the deviants.
Therefore, an assessment of places such as Montana began a desire to create the perfect environment to promote legalization with the island’s requirements kept in mind.
Governor Alejandro Garcia Padilla put in an executive order to have medical marijuana approved. It would be administered by the government based on prescriptions and sold through licensed providers. It was a method that’s used across the States.
It was a surprise move, but one that had to happen considering the necessity for an influx of funding. Marijuana provided this, not only at the medical level but at a recreational one too. Following the footsteps of other areas, Governor Alejandro Garcia Padilla started pushing for comprehensive legalization.
All forms of cannabis are now being approved for medical use (i.e. pills, creams, drops, patches) to ensure a satisfactory arsenal for treatment against varying conditions as highlighted by the state.
Marijuana is now moving towards decriminalization and eventual legalization across the board. It is a positive step based on the actions seen in other locations in the States. Puerto Rico has decided to dabble in a variety of legislative practices to see what works when going down this path.
They’ve come with a multi-faceted approach by combining Washington’s laboratory regulations, Colorado’s three-tiered model for marijuana business, and Nevada’s reciprocity setup. It all comes together to form what Puerto Rico is expected to approve early next year.
This is the foundation upon which the question will be answered in this read as it’s important to understand how Governor Alejandro Garcia Padilla and his advisors have put this solution together.
Island’s Economic State
How is Puerto Rico doing as a state? With a declining population at around 3.5 million people (2014 census), the island is hitting a plateau. It is not progressing as needed and is instead moving in the opposite direction trying to manage its people.
A state in this situation cannot maintain itself without going into debt, and that’s what appears to be happening.
Governor Alejandro Garcia Padilla has assessed the economic state of his island and realized there is work to be done. The financial state of Puerto Rico as of right now is stale. The $399 million payment due in May (2016) has gone by the wayside. They skipped it not being able to accumulate enough funding. The loans are being defaulted to a point it is starting to wane on the island’s economic prosperity. The accumulated debt is pushing businesses to cut employees to manage expenses.
It is a vicious circle and one the government will be looking to move away from. If the status quo remains, it’s expected the population is going to dwindle further as people move to mainland states.
With this in mind, the legalization of marijuana was bound to take place for a mandatory influx of cash.
Marijuana’s Financial Potential
What is the financial potential of legalizing marijuana? What is intriguing about this as a method to push Puerto Rico’s economic potential to a new height? It all comes down to the money being wasted on criminalization with marijuana in its current state.
It is a two-pronged approach by removing financial power out of a deviant’s hands and making sure it’s regulated. Plus, there is money to be earned as long as the legalization goes through and that’s what the Governor is looking at as of right now.
The influx of value is going to come from three segments:
1) 100,000+ Medical Patients (Local Needing Marijuana
2) Medical Tourism (From States Where It’s Illegal)
3) Recreational Use
The market is abundant. It is one asking for a meaningful solution, and this will help the island prosper. If everything works out as planned and the regulations go through, it will provide an immediate boost to the economy and one that should sustain itself.
Economists have poured through the details and notice states who do go down this path tend to prosper. The incoming funds are often a plus on top of what is being saved from decriminalization.
The financial potential of this market is vast because it is a large one. This is not a small island and has a significant population. With an abundant market in place with willing buyers, the prices should remain competitive, and therefore lead to a boon for Puerto Rico’s government.
The desire to have it approved as soon as possible will be high. The 21 applicants who have applied for licensing are going to be vetted and approved sooner rather than later. It is something they are pushing through with eagerness to ensure things move forward as planned.
So, coming back to the question, “will legalizing marijuana bolster Puerto Rico’s economy?” and the answer is yes it will. This is going to give it an incredible boost that is going to save it in the short-term. Based on projections, the state should end up doing well in the long-term too.
It is a move that has been made with great thought and the acceptance across the board makes it a sensible option for Puerto Rico.
The market itself will determine how the economy is impacted, but all signs are pointing towards a significant rise as soon as things are approved.