In Chicago, Mayor Rahm Emanuel wants to use tax revenue from legal marijuana sales to fund pensions.
"Illinois legislators will be taking a serious look next year at legalizing recreational marijuana," Emanuel said in a speech to the city council. "Should they follow that course, a portion of that revenue could go toward strengthening our pension funds and securing the retirement of the workers who depend on them."
Emanuel hasn't traditionally been 420-friendly, either. As a member of Congress, he rejected multiple measures to protect state medical cannabis laws from federal interference.
But as mayor of Chicago, he's come to see the light. And it's green.
A University of Illinois study released last month projected that legalizing cannabis in Illinois would create 24,000 jobs, generate more than $500 million in tax revenue, and infuse about $1 billion into the state economy by 2020.
Meanwhile, Chicago is bracing for nearly $1 billion in new required annual retirement payments just five years from now. Those increased payments ramp up beginning next year. And the city's four pension systems are already underfunded by a combined $28 billion.
As a state, Illinois is even worse off. Its contributions have fallen short of the increases in pension liabilities for 12 of the past 15 years, resulting in a three-fold increase in the funding gap. None of the five plans are even halfway funded.
On the whole, Illinois is carrying more than $7 billion in debt.
Indiana, Connecticut, Louisiana, Hawaii, Arizona, Ohio, Kansas, Alabama, Mississippi, West Virginia, and New Hampshire have pension problems too. And fully half the country faces budget shortfalls in 2018.
Things are even worse on a federal level, where we're carrying a $21.8 trillion debt burden that's rapidly growing. The country's budget deficit of $303 billion in the first two months of fiscal 2019 is already 50% higher than it was last year.
In fact, we're running out of money so fast that the Social Security "bank account" will be exhausted in 2033, when it will have only about 77% of what it should pay out that year.
So, in a way, America has a pension crisis, too.
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And that's where marijuana comes in.
According to the latest study from New Frontier Data, legalizing marijuana nationwide would create at least $132 billion in tax revenue.
The retail sales tax alone, projected to be 15%, would rake in $52 billion by 2025. And in reality that tax rate would likely be much higher - as much as 25%-30%.
Legalization would also create more than a million new jobs.
Zooming back in on the local picture, a new report commissioned by New York Governor Andrew Cuomo suggested the state could reap as much as $436 million annually in new tax revenue from legal marijuana sales. New York City alone could garner as much as $335 million.
Legalization there could happen as soon as next year.
Across the river in New Jersey, a new Democratic government is already moving forward with its plans to go green. It expects a little over $210 million in state taxes from nearly $1.8 billion in annual marijuana sales.
Frank Gilliam, the mayor of Atlantic City, says the state's long-forgotten tourist resort could be revitalized as a "Marijuana Mecca."
In February, he went to Las Vegas to explore Nevada's newly-regulated cannabis market, which reported $30 million in tax revenue and nearly $200 million in sales in the first six months of legalization.
Colorado, the first state to fully legalize pot, said its retailers made $1.5 billion last year and accrued $247 million in taxes and fees. And in Oregon, state and local recreational marijuana sales taxes generated $78 million in tax revenue in 2017, up from $60 million in 2016. This year, sales are outpacing projections by state economists.
The state's Office of Economic Analysis has revised its tax revenue projections up to $26.8 million for the 2017-2019 period and up to $20.3 million for the 2019-2021 period. It also noted that further upward revisions are anticipated if current trends hold.
Of course, this is more than a trend. It's an inevitability. Marijuana will be legal at a federal level, and there's a fair chance its tax revenue will save Social Security, as well as state-level pensions.
A decade and a half from now, marijuana is going to be funding retirements across the country. And that's good news for you if you're smart enough to follow cannabis investing experts like Jimmy Mengel.
Publisher of The Marijuana Manifesto, Jimmy just released a brand-new, must-see list of pot stock takeover targets for his Crow's Nest subscribers. You can find that report here.
Fight on,
Jason Simpkins
Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page.