Alaska's marijuana legalization: Boon for the economy?

Alaska joins the ranks of Colorado and Washington as the newest state to legalize marijuana.

The ballot measure adopted last November officially goes into effect Tuesday and allows adults 21 and older to possess an ounce of pot and up to 6 plants. However, full details regarding the sale of the drug have not been fleshed out.

Yahoo Finance Senior Columnist Michael Santoli doesn’t think legalization will provide much of an economic boost to the state.

“I don’t know about a boon, but it would help. There’s no way to reduce economic activity,” he says. “People go over there because they want to do their own thing…I don’t think that it’s going to cause a big flood of travel to the state.”

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Colorado’s legal marijuana industry generated over $700 million in economic activity, and over $63 million tax revenue last year according to the state's Department of Revenue. The state also saw a surge in tourism. Santoli believes Colorado has been particularly effective in capturing the marijuana market.

“I do think Colorado has been very boosterish about how it has gone about creating its marijuana industry,” he says. “It has been very upfront about ‘hey come here and you can partake and participate in this micro-economy.’”

Santoli points out that Alaska’s marijuana legalization has far more important political ramifications.

“Maybe politically though it says something because it’s a relatively Republican state,” he notes. “It might just say that more states are likely to consider this no big deal to pass.”

If the state legalization trend continues, marijuana could be a $21 billion industry by 2020, according to a report from Greenwave Advisors. If marijuana is legalized on a federal level, revenue is projected at $35 billion: an industry three times the size of the NFL.

However, as for Alaska, there are much greater forces impacting its economy, Santoli adds.

“It seems a whole lot smaller than what the price of oil has done.”