Millions Blowing into the Windy City
Illinois just opened up the second-largest cannabis market...
There will soon be a pungent smell wafting through the Windy City…
Illinois just became the 11th state to legalize recreational cannabis when Governor J.B. Pritzker signed the bill into law on Tuesday. It was the first state to do so through the legislature — not a ballot initiative — meaning that the politicians are now comfortable enough with cannabis to pass these laws on their own.
This is a big deal.
Close to 13 million people live in Illinois — 2.7 million in Chicago alone. That immediately makes it the second-largest cannabis market in the U.S. behind California. Illinois could bring in hundreds of millions of dollars quickly, opening up one of the largest new cannabis investment areas in the country.
To put it in perspective, Colorado has around 5.7 million people. Its recreational marijuana industry brought in an astounding $1.5 billion last year alone, and over $6.5 billion since it legalized in 2014. $1 billion of that has gone directly to the state.
“It’s going very well,” said Colorado Governor Jared Polis. “It’s creating tens of thousands of jobs, tax revenue for the state, filling up buildings for landlords and reducing crime.”
“Although I like to tell my peer governors in other states ‘It’s not going well, don’t do it,'” the Governor joked. He clearly wants to keep much of that money for Colorado.
But the secret is out: cannabis has been a wild success and is bringing in record tax revenues for states. The political pendulum has swung completely in its favor, and we can expect to see every other state fall in line over the next few years.
I also anticipate that the federal government will finally have to lift the federal ban on cannabis — opening the floodgates entirely...
The Illinois announcement not only offers huge benefits for the investment community, but for impoverished communities, crime rates, and the prison-industrial complex.
The measure also allows the governor to pardon anyone with a criminal record for low-level cannabis crimes — which could clean the records for thousands of citizens and allow them to go back to work and become productive members of society.
It also provides licensing preference to minority cannabis shop owners as a kind of reparation for the war on drugs that had imprisoned minorities at a much heavier rate than the white majority. The ACLU found that blacks made up 15% of Illinois’ population, but accounted for 60% of cannabis arrests.
“The war on cannabis has destroyed families, filled prisons with nonviolent offenders, and disproportionately disrupted black and brown communities,” Gov. Pritzker said. “Law enforcement across the nation has spent billions of dollars to enforce the criminalization of cannabis, yet its consumption remains widespread.”
The governor also called for 25% of the taxes raised through cannabis sales to be reinvested in impoverished communities, with another 20% going to substance-abuse treatment programs.
It’s a very ambitious bill, to be sure.
But if the state can open up a potential billion-dollar industry, create thousands of new jobs, bring people the opportunities to get out of poverty, and reduce the number of its citizens rotting away in prison, it could be a model for other struggling cities and states.
Cities like Baltimore, my home...
Chicago and Baltimore have a lot in common. Sadly, I’m not just talking about waterfronts downtown or struggling baseball teams...
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We both have dreadful crime problems, resulting in massive prison overcrowding.
765 people were murdered in Chicago last year; 2.81 people per ten thousand. That’s good enough for number 24 for murder rates in the U.S.
Baltimore, however, had 318 murders last year; 5.14 people per ten thousand. That ranks us number 5.
For those keeping score, East St. Louis — also in Illinois — claimed the top spot with 10 murders per ten thousand.
Most of this violence is drug related. Most of the prison population is there because of drug-related charges. While many of these crimes have nothing to do with marijuana, the fact is that by taking petty marijuana crimes off the table, it not only takes that product out of the drug dealer’s tool kit, but it opens up the police force to deal with more serious crimes.
Baltimore State's Attorney Marilyn Mosby identified that clear problem, and announced that her office will not prosecute marijuana possession cases.
"Ask any mother who has lost a son to gun violence whether she wants us to spend more time solving and prosecuting her son's killer or to spend time on marijuana possession," Mosby said in a statement.
"It's not a close question."
Decriminalization is step one. Step two is opening up shop for legal cannabis, which Maryland is also looking into. The Maryland General Assembly task force began work this week for just that purpose. The force is in the early stages of determining how cannabis would be taxed, what effect it would have on crime, and how it would impact both criminal justice and public health.
A legalization bill could go to the assembly by 2020.
I believe legalization in this way is a moral imperative. Let's get focused on violent crime. Let's stop paying for people to waste away in prison for minor drug crimes. Let's put good people who made a minor mistake back to work.
And let's use the untold billions in tax dollars to make all of our lives better.
I think it's a foregone conclusion.
Jimmy is a managing editor for Outsider Club and the investment director of the personal finance advisory, The Crow's Nest, and cannabis stocks advisory, The Marijuana Manifesto. For more on Jimmy, check out his editor's page.
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