Marijuana legalization continues to spread across the U.S. In the midterm elections, Michigan became the 10th state to legalize recreational marijuana use. Voters in Missouri and Utah passed initiatives to approve medical marijuana, growing that list to 33 states.

Popularity of the drug for medicinal and recreational use – and its positive economic impact on some states where marijuana is legal – could lead to more states legalizing it. A recent Pew Research Center survey shows 62 percent of Americans think marijuana should be legalized, with 74 percent of millennials in favor, along with 63 percent of Gen Xers and 54 percent of baby boomers. State tax revenues related to both recreational and medicinal marijuana sales in Colorado totaled nearly $250 million last year. Some projections see California collecting over $1 billion annually.  

“The walls are coming down,” says Daniel Ameduri, co-founder of the Future Money Trends newsletter. “Legalized cannabis is one of the fastest-growing sectors of the economy, attracting investors and state governments.

“The landscape is changing because policy follows sentiment, and it’s a great economic growth opportunity for states on several levels.”

 Ameduri explains four key ways cannabis legalization can benefit states:

• Create Jobs. Nurseries and dispensaries, as evidenced in the cannabis-legal states, create many employment opportunities. In California, over 80,000 jobs came about – producing a $3.5 billion increase in labor income – due to legalized marijuana sales, according to a study by ICF International. Colorado, which saw an estimated $2.4 billion worth of cannabis-related economic activity in 2015, has over 40,000 occupational licenses connected to the cannabis industry. “Just for starters, you need people to farm, distribute, and sell products,” Ameduri says. “Then you have a whole host of industries doing support work for the cannabis-related companies.”

• Boost tax revenues. Along with the big haul state governments can make are the ways that new state money could be invested in education and business development. “The potential of tax revenues is the carrot dangled before the states,” Ameduri says. “With so many states in a pinch or running in the red, why would you not legalize it?”

• Save law enforcement costs. Making marijuana legal means many fewer court cases and incarcerations, Ameduri points out. “States that legalize marijuana would be adding millions to their coffers and subtracting millions from their wasted expenses,” he says. “They are likely to lower their law enforcement costs substantially, right off the top by removing it from the list of controlled substances.”

• Help address social ills. Another offshoot of boosted tax revenues from cannabis sales: Colorado put some of the money into a fund to help create housing programs for the homeless and to address the state’s opioid epidemic.

“More people spoke at the midterms about marijuana, and the momentum for more legalization is strong,” Ameduri says. “More states are seeing it makes a lot of sense as a new component of the economic engine.”