How Cannabis is Quietly Powering a Multi-Million Dollar Economic Boom in CNMI—And You Won't Believe the Ripple Effects!

The cannabis industry in the Commonwealth of the Northern Mariana Islands (CNMI) has proven to be more than just a direct revenue generator, with a total economic impact of $1.466 million. According to Joe B. Palacios, a member of the Commonwealth Cannabis Commission, the sector is sparking growth across multiple industries, creating a ripple effect that extends far beyond the $217,000 in business gross revenue tax (BGRT) collected by the government as of July this year.

Palacios addressed recent claims that the government is losing money on cannabis regulation because it collects only $217,000 in taxes but allocates $300,000 to fund the Cannabis Commission. He called these claims "misleading" and emphasized that the BGRT represents just 15% of the industry's total economic output.

Beyond direct taxation, the cannabis industry has catalyzed growth in complementary markets. Palacios explained that businesses selling products related to cannabis cultivation—such as topsoil and gardening supplies—are seeing increased demand. “If a store was selling one container of topsoil before, they’re now selling three or four,” Palacios said. This increased demand fuels growth in local retail and supply sectors, illustrating how cannabis production is driving a chain of economic activity.

The cannabis industry in CNMI has also managed to operate efficiently from a government spending perspective. With $217,000 in taxes collected, the actual cost to oversee the industry is only $60,000 annually, a small investment considering the industry’s multi-million-dollar economic impact. As a businessperson, I would gladly invest $60,000 in an industry generating $1.466 million," Palacios said, emphasizing the value cannabis offers to the local economy.

In addition to stimulating other businesses, the cannabis sector is also creating jobs for local residents. According to Palacios, all employees of cannabis producers and dispensaries are locals, and the money generated by the industry stays within the CNMI.

This ensures that the industry not only generates revenue but also fosters long-term economic sustainability by supporting local livelihoods. No matter the tax revenue, what really matters is whether the industry creates jobs and stimulates the local economy. The cannabis industry does both, Palacios said.

This ripple effect highlights the cannabis sector’s potential as a driver of economic growth, far beyond the figures from tax collections. By boosting related businesses and keeping money within the community, the cannabis industry is laying the foundation for a more diversified and resilient local economy.

Other Cannabis Commission members include Chairman Juan Iguel, Vice Chair Journie M.

Hofschneider, Thomas L. Songsong, and Joseph S. Rios Jr., with Mikiotti Evangelista serving as managing director. The commission was allocated $277,750 in the fiscal years 2024 and 2025, ensuring continued oversight and support for this rapidly growing industry.

Is the cannabis industry a key driver of broader economic growth in CNMI?