Introduction
Marijuana has gone from being illegal to being at the forefront of business and new ideas in economic history. Despite the problems it has caused, this flower surprise still amazes firms and scientists with its economic potential. As laws and cultural views change and markets become more aware of this plant’s potential, its story unfolds (Thanakit,2022). The many ways that marijuana’s medical and social uses affect the economy are looked at in this thesis. In this changing world, we find the winners and losers and show you how to get rich while handling the tricky challenges of this new frontier.
Winners
Legal Cannabis Businesses:
Legalizing cannabis is suitable for businesses that grow, process, distribute, and sell it. This group includes dispensaries, growers, companies that make related products like sweets and vape cartridges, and more that offer marketing, packing, and advice.
Tax Revenues:
A significant amount of tax revenue might be generated for governments if marijuana were legalized(Krishna,2023). There is the potential for cannabis sales taxes to be used to fund public initiatives and services.
Job Creation:
Marijuana, for medical purposes, has the potential to provide employment opportunities in the fields of agriculture, production, and research. The local economy and employment opportunities could improve.
Losers
Potential Risks to Youth and Public Health:
The health of the general population, particularly youngsters, is a concern for those who are opposed to legalization. People believe that if marijuana is more straightforward to get, then it will be used more often by adolescents, which may be detrimental to their mental and cognitive development.
Regulatory Costs:
Governments may incur significant costs in order to administer and enforce marijuana regulations if they decide to legalize the substance. Small sales policy, licensing, compliance monitoring, and ensuring that goods are safe are all items that might fall under this category.
Alcohol and Tobacco Industries
Alcohol, tobacco, and weed businesses compete with each other based on what customers want and how they prefer to use their products. As weed becomes legal and more socially acceptable, the wide range of effects and supposedly safety benefits may draw some users away from smoking and alcohol. Different societal values, legal structures, and product access can affect this. Customers ‘ behavior and market patterns may change because of how people feel about weed. This could help the tobacco and alcohol industries adapt and develop new ideas to prevent losses.
Four factors of productivity include
The four aspects of production are necessary for any business to make goods and provide services. These factors are land, which includes minerals and woods; labor and capital, which includes investments and machines; and business, which brings new ideas, takes risks, and organizes things to work together. The world’s economy grows, moves forward, and gets richer because of these things.
Natural Resources:
Natural resources that are plentiful and varied may make people more productive by giving them access to raw materials. Countries with many metals, coal, and oil may use these resources to grow their economies and industries. Rich soil or water used for irrigation may also increase food production and exports.
Labor:
Productivity depends a lot on how much and how well people work. A skilled and informed workforce can help with new ideas, effectiveness, and technology progress. For example, putting money into education and training programs can help workers get better at what they do, boosting industry, technology, and service output. Also, improvements in technologies that save workers’ time, like automation and robots, can make workers more productive by simplifying processes and cutting down on manual work.
Capital:
Machines, tools, structures, and other things used for production are all examples of capital. For workers to be more productive, they need to be able to make more with the same amount of input. Industrial and factory production may go up with the help of new technology and tools. Cutting down on wait times and improving connections and infrastructure improvements in transportation networks, communication systems, and energy lines may lead to higher output.
Technology and Innovation:
Productivity grows when new methods, tools, and materials are used that make things more efficient and effective. Technological improvements have changed communication, data handling, and business processes. This has made all industries more productive. New ideas in medicine, farming, and energy could lead to better results, higher efficiency, and more production, which would help the economy grow.
The relationship between savings capital formation and consumption
Saving, building up cash, and spending are all critical for economic growth and progress and are linked to each other:
Savings and Capital Formation:
Saved revenue is not spent immediately but is kept for later. While individuals, businesses, or states save, capital is created that can be spent. Equipment, infrastructure, and technology purchases are usually paid for with money saved (Fernando,2024). You can save money for projects that increase output, efficiency, and economic growth.
Capital Formation and Consumption:
Consumer spending habits are affected by capital production, which also affects pay, jobs, and the spread of income. Investments in capital goods and infrastructure can make businesses more productive, which could lead to higher wages and more jobs. Individuals with higher incomes may buy more goods and services that improve their quality as they age. In addition to increasing customer spending, creating capital promotes business growth, creativity, and entrepreneurship.
Savings and Consumption:
Although saving money means putting off buying, it also changes how people spend it. Higher savings may lead to more investment and capital development, increasing income and economic growth. Capital buildup can make people more productive, which may lead them to spend more of their income. This improves overall demand and economic activity. Spending less during economic downturns is easier when you have savings.
There are cycles in saving, making cash, and spending that feed off of each other. Savings pay for the creation of capital. This increases income, spending, and output. Economic growth is caused by people saving, investing, and spending (money).
The Malthusian Perspective on Economic Growth and Population Dynamics
People know Thomas Malthus for his “Malthusian Trap” or “Malthusian Theory.” While the population grew exponentially, Malthus thought the economy could only grow in a straight line or slowly.
According to Malthus, population growth is faster than resource growth, such as food. He thought that war, sickness, and famine would stop people from having children. Once these tests are over, the population and resources will be equal.
Malthus’ ideas say that unchecked population growth lowers living standards by using more resources(Lueger,2019). Despite what Malthus said, technological improvements and how economies are run have allowed societies to support more significant numbers and make life better for everyone.
Even though Malthus’ ideas are still talked about when people argue about population growth, resource availability, and sustainability, they point out that population trends and economic development are essential.
The Interplay of Economic Growth, Standard of Living, and Productivity
Productivity, living standards, and growth are all linked and affect the well-being of society.
Economic Growth:
A country’s economy grows by making more things and providing more services—averaged by changes in GDP or GNP. Improving living standards and lowering poverty require economic growth that creates jobs, brings in money, and invests in public services and infrastructure(Yuniarta et al., 2023). Riches and business opportunities grow with sustainable economic growth.
Standard of Living:
Basic needs like food, shelter, medical care, education, and fun activities are all part of a person’s standard of living. People can make more money and have more options when the economy grows, but that does not improve life. The economy, social safety, health care, and protecting the environment are some of the other things that can affect quality of life. Governments must encourage proper resource distribution and growth that benefits everyone to ensure everyone has a good quality of life.
Productivity:
What productivity means is utilizing labor, cash, and resources to make goods and services as efficiently as possible. Businesses can make more with the same amount of resources or less with fewer resources if they are more productive. Making things more productive raises living standards, output, and competitiveness, which leads to economic growth. Investments help short-term and long-term economic growth in technology, education, infrastructure, and new ideas.
Furthermore, there is a link between economic growth, living standards, and efficiency. A rise in living standards is mainly due to economic growth. However, for economic success to truly help everyone, lawmakers must favor inclusive growth, fair resource sharing, and long-term production gains.
References
(Fernando,2024). Capital Expenditure (CapEx) Definition, Formula, and Examples.Retrieved From: https://www.investopedia.com/terms/c/capitalexpenditure.asp
Krishna, (2023). The Economic Benefits of Legalizing Marijuana.Retrieved From: https://www.investopedia.com/articles/insights/110916/economic-benefits-legalizing-weed.as
Lueger, T. (2019). The Principle of Population and the Malthusian Trap. Darmstadt Discussion Papers in Economics, p. 232, 2018.
Purnamawati, I. G. A., Yuniarta, G. A., & Jie, F. (2023). Strengthening the role of corporate social responsibility in the dimensions of sustainable village economic development. Heliyon, 9(4).
Thanakit, (2022). Possible Effects of Legalization of Marijuana on the Economy and the Individual. Retrieved From:
https://www.scirp.org/journal/paperinformation?paperid=121347
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