The Synergistic Benefit Mechanism of Medical and Recreational Marijuana: Economic Gains of Cannabis Taxation based on US Federal Law for Corporate Governance and Sustainability

Purpose: Marijuana legalization is brought about by the demands of people as social utility either for medical or recreation consumption. It is essential that the control of cannabis fulfills the goals of corporate governance and sustainability. This paper aims to measure the profitability of marijuana taxation over a time period as trend analysis of economic gains. Methodology: The socio-legal taxation of marijuana in the United States follows a descriptive research design. The beneficial gains of marijuana as medical use created this substance to be controlled under contract law transactions. The removal of cannabis in US Pharmacopeia modified the tort law restriction for legalization of marijuana as recreational consumption. The recreational cannabis taxation together with medical marijuana state taxes are essential to fulfill the 4 pillars of corporate governance and sustainability for strengthening constitutional rights. The legalization of marijuana through votes of the people repeals the criminal punishments imposed by federal law to advocate the synergistic concepts of economic theory. Findings: State tax theory creates voluntary principles in transactions together with trend analysis in prices and demands of people resulting to efficiency in mutual gains through lessening the value of participation under a harmful environment. Hence, Pigouvian tax follows the public welfare of medical marijuana and common revenue of recreational cannabis diminishes the overall costs of social consumption. Federal laws control marijuana usage through Pigouvian taxes of medical use with lessened participation in externalities and common revenue in cannabis consumption, as a legalization process of other states in reinstating tort law for business purposes, while still enforcing criminal penalties to remaining states, in compliance with US federal laws, not in favor of medical and recreational marijuana use. The economic theory supports the legalization of medical and recreational cannabis use through taxation as profitable gains by allowing voluntary market transactions of marijuana as fulfillment to corporate governance and sustainability for more allocation of public funds. From 2002 to 2018, medical and recreational cannabis users increased to 70% of social utility through lessening the value of participation, a win-win in efficiency of economic design. In 2010, marijuana taxation generated $8.7 billion as federal public funds, with accompanied criminal penalties to other states. Recommendations: Economic theory is a conceptual design supporting the beneficial gains of legalizing marijuana via taxation. This economic design promotes fair responsibility of market gains while still in strict compliance of enforcing criminal punishments to violators. The people's votes for legalization of marijuana taxation indicates that this economic policy has come by choice in a particular state as constitutional right of either a medical opinion or business ethics. However, cannabis is deemed to be a substance subject for criminal liabilities, similar to other patent drugs under taxation as well. Hence, it is suggested to create artificial intelligence using authorless works for clinical trials and other relevant studies subject to patent law of marijuana use, as advocacy of public welfare and safety since voluntary transactions are apparent harmful environment.