Economist discusses impact of legalization on state’s economy October 3, 2022 By Griffin Coop Dr. Michael Pakko, the economist who authored a study on the economic impact of the legalization of adult use marijuana in Arkansas, discussed his cannabis analysis with Roby Brock during an appearance on KARK public affairs TV show Capitol View Sunday. Pakko, chief economist and state economic forecaster at the Arkansas Economic Development Institute, said his study considered states that have transitioned from medical marijuana markets to adult use markets. Pakko said his study also tried to determine how much spending would transition from the black market to the legitimate adult use market. Pakko said he relied on some government surveys that estimated how many people in Arkansas use marijuana but admitted there was some “guesswork” involved in the process. Pakko also discussed the impact of cannabis-related tourism and the spending that can be expected by people who would travel to the state specifically because of cannabis legalization. Pakko’s study, which can be found here, was commissioned by Responsible Growth Arkansas, the industry-backed group sponsoring the Arkansas Adult Use Cannabis Amendment. The study found that legalization could result in significant economic impacts, including an overall economic impact of $2.36 billion, $460 million in tax revenue and 6,400 jobs over five years. The study projected $455.3 million in new visitor spending and $91.1 million in new tourism spending over five years. During the eight-minute interview, Brock said he’s heard opponents say that states that have legalized marijuana for adult use have more car accidents, which can lead to higher insurance rates, as well as decreased worker productivity. Brock asked Pakko if that factored into his analysis. Pakko said his analysis was “purely economic and financial,” examining the impact on the state’s gross domestic product, jobs and tax collections. Pakko said that, while opponents might point to some non-monetary considerations, proponents might also “point out the cost to society of arresting, processing and incarcerating people for possession.”
