California capital could reap billions from legalized pot, study says

California’s state capital region could reap 20,000 jobs and generate $4.2 billion in business if it becomes a hub for a legalized marijuana industry, a study released on Monday showed, weeks before voters decide whether to allow recreational use of the drug.

The report from the University of the Pacific in Stockton was commissioned by the cannabis investment company Truth Enterprises, one of hundreds of businesses counting on voters to legalize pot next month.

“The Sacramento region should be to cannabis what Detroit is to automobiles in terms of both a center of innovation as well as production,” said Daniel Conway, who left his job as chief of staff to Sacramento Mayor and former NBA star Kevin Johnson to become Truth Enterprises’ managing partner. “This region has the ability to be to cannabis what Sonoma and Napa are to wine.”

If local leaders choose to limit the number and type of marijuana businesses, the study showed, legalization would bring as few as 1,600 jobs and generate about $322 million in revenues, wages and other economic impacts.

Polls indicate voters in the most populous US state are likely to legalize marijuana on Nov. 8, instantly creating a massive marketplace and making California the fifth US state to permit recreational pot use.

Centering some of that business in the Sacramento region would take advantage of the area’s proximity to farmland and agricultural processing facilities as well as such population hubs such as the San Francisco Bay Area and tourist destinations like Lake Tahoe and the Napa Valley, the study said.

Local business and political leaders have for years searched for ways to reinvigorate the slightly faded feel of Sacramento area, where empty storefronts mar numerous shopping centers and abandoned houses sport boarded-up windows despite nearly a decade of slow recovery from the Great Recession.

Downtown is undergoing a massive facelift around a new arena for the NBA Kings, with dozens of new shops and restaurants planned. The city is close to winning a major league soccer franchise, and its restaurant scene is growing. “The entire Sacramento business community is looking at this with different eyes today,” said Joshua Woods, chief executive officer of the Sacramento Region Business Association. “With this many jobs, you can’t ignore it.”

The University of the Pacific report offers the first hard look at the potential economic impact of the marijuana business on the Sacramento region, Woods said. But that does not mean his group or other business and political leaders - is ready to make the area a hub.

For that to happen, policymakers would need to be persuaded that a busy marijuana growing and processing industry would not also be a magnet for crime, addiction and other problems.—Reuters