Why talk about the cannabis industry? Well, for sure it is on many people’s mind

Question

Why talk about the cannabis industry? Well, for sure it is on many people’s minds, particularly those in a more traditional college age cohort of people. In the above readings you will see references to many interesting things.    Two words of warning.   First, the cannabis industry is really not that well defined in terms of what it contains. Some cannabis products are differentiated from products related to marijuana.   Second, within the marijuana industry, at least the legal parts of it there are nearly separate medicinal and recreational elements.

The discussion question for this week.   If the trend towards legalization, at the state level, for all cannabis related goods continues; and most analysts think it will; how will the Fed’s ability to monitor and control the US money supply be impacted??

please provide a detailed explaination

Explanation / Answer

With increased level of legalization and control related to the concerned industry, all the dealers, their trade activity, as well as the exchange of money, will be legalized and covered by the regulatory authorities. It means that output of this industry and resulting money supply will be counted in the US GDP. Hence, Federal Reserve will have increased level of ability to predict, monitor and control the overall money supply in the economy. Now, the Federal Reserve has the data of money supply related to this industry also, that was earlier the part of undercover economy and treated as leakage to the US GDP. Now since, there is a tax collection, disclosure of the trading data and follow-up of the necessary compliances, then it brings control to the Fed and transparency to the movement of money and trade in the industry.  

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.