What Legalization of Cannabis in California Means to the Rest of the World

by Ontaria Woods

In the November election, there will be a total of nine states voting to legalize cannabis for recreational or medical use. However, with California having the largest economy in the U.S., and ranked sixth largest economy in the world in 2015, Proposition 64 will have the greatest influence on the cannabis industry thus far.

With polls showing an almost 60 percent passing rate, Proposition 64 will allow persons over the age of 21-years-old to use marijuana for recreational use under state law, and sales and cultivation taxes will be established.

The California economy will “put pressure on the government to reclassify or deschedule the drug to help ‘cannabusinesses’ better conduct their operations with more access to banking services,” said Jessica Rabe, a research associate at Convergex, a global brokerage company based in New York.

According to Daniel Yi, Director of Communication at MedMen, a leading cannabis firm based in Los Angeles, “In California, passage of Proposition 64 could add $8.38 billion in annual sales to an already robust medical market worth an estimated $2.83 billion.” Legal marijuana is already estimated as a $7 billion dollar industry in the U.S.

Citing Federal law, U.S. banks have refrained from business deals with pot establishments even though in 2014, the U.S. Treasury Department allowed banks to offer accounts and other with under certain guidelines.

Sarah Trumble of Third Way believes that if sales estimates are correct and the industry becomes a multi-billion dollar one as predicted, the big banks will begin working with pot establishments.

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