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Kratom has been a hot topic in the United States for about a decade now. All credit for this goes to the unnecessary opposition coming from the kratom critics. You see, several government bodies and powerful medical tycoons have tried everything in their capacity to place a kratom ban in the US. Big medicine corporations have specifically been involved in spreading negativity due to their vested interests. However, their efforts have largely remained unsuccessful. Why are some corporations so desperate to stop the sale of kratom though? And what does kratom do to the economy? These are some questions that may have popped up in your mind.

In this article, we discuss the effects of Kratom on the economy. Then, we talk about an unlikely yet unfortunate scenario: how will the economy suffer if kratom is banned?

Kratom Effects on Economy

Before discussing kratom’s effects on the economy, let us talk briefly about what kratom is and where it originates from.

What is Kratom? 

Kratom leaves come from the ever-green kratom tree (also referred to as Mitragyna Speciosa) that is grown avidly in Southeast Asia. It is specifically cultivated on a large scale in Thailand, Malaysia, and Indonesia.

The kratom leaves predominantly have three types (strains) that are distinguished by the color of the veins and stems. These include red, white, and green. Furthermore, every kratom strain varies in the qualities of the leaf.

The two main components of the kratom leaf are Mitragynine and 7-hydroxymitragynine. Usually, kratom products have around 2% Mitragynine along with 0.01% to 0.02% 7-hydroxymitragynine. It is readily sold in the form of powder and kratom capsules.

Where is Kratom Imported From?

In the United States, a big chunk of kratom is imported from Indonesia. However, unlike in the USA, kratom cannot be bought locally in Indonesia. Hence, most of it is harvested primarily for exports and without a doubt, the Kratom industry is currently booming in Indonesia.

While the US and the other western countries have just recently discovered kratom, the local population in Indonesia, Malaysia, Thailand, Myanmar, and Papua New Guinea have known about it for several centuries. It is just a recent thing though, that some countries have started capitalizing on Kratom’s exports. This is interesting because Kratom is still a controlled substance in Indonesia.

Kratom and the Indonesian Economy

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So, how does kratom affects the Indonesian economy? Well, Indonesia has a large population considering its size (270 million). With that, Indonesia’s GDP is currently ranked at 16th position based on the nominal figures (higher than $1.1 trillion) and at 7th position based on PPP (Purchasing Power Parity).

If you look at the total exports of Indonesia ($180 billion), they are significantly lower than the imports ($188 billion). With that, there is a -2.7% budget balance. For the Indonesian Economy, ever single dollar of export is critical to fill up the deficit.

Since Kratom import is largely legal in the United States, a big number of farmers in Indonesia have made themselves a fortune by cultivating kratom. Kratom is considered to be the new cash crop of Indonesia.

It is important to note that the demand for rubber and palm-oil (two of Indonesia’s heavily exported products) is not falling. Hence, a big number of farmers have turned towards Kratom cultivation. They are, of course, backed up by the Indonesian government. 

To meet up with quality standards required by vendors in the USA, many farmers in Indonesia have now set-up state of the art equipment to ensure quality control. However, many dishonest sellers still try to take advantage of this boom by selling poor-quality products under the guise of authentic kratom.

Though, the local sale of this kratom is not legal in Indonesia. Still, due to the lack of data, chances are that a big portion of this kratom is also sold locally in Indonesia (albeit in an illegal way). Nevertheless, it has become the bread and butter of thousands of farmers and their families in Indonesia.

However, this current boom may not last for a lifetime. This is primarily because the future of Kratom in the USA (which is the prime importer of Kratom from Indonesia) is currently on blurry lines. Kratom advocates have been specifically fighting for its normalization yet the big corporations with vested interests do not want to give up.

Still, an unprecedented amount of money has flown into the rural communities in Indonesia from the export of Kratom. To a point, where these previously poor farmers are now able to afford motorized vehicles. Indeed, it is no less than a fortune for these families.  

We believe that you’ve received a good clue regarding the initial question, ‘what’s the effect of kratom on the Indonesian economy’.

Kratom and the US Economy

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Now that we have seen how kratom is shaping up the Indonesian economy, it is natural for one to ask, ‘What role does kratom play in the US economy?’

Consider the fact that the US is not an exporter of Kratom. Instead, a big chunk of kratom is imported into the US from Indonesia. But where does all this kratom go? It goes on to the shelves of approximately 10000+ kratom vendors that have kratom for sale.

This figure is from the year 2016. By now, chances are that this number has significantly increased. These Kratom vendors in the US are generating yearly revenue of more than $1 Billion, which is a huge amount. If Kratom remains legal in the United States, just imagine where this figure will eventually go (because new Kratom stores are popping up every day).

But what’s the effect of kratom on the economy in an unlikely event where it is banned? Well if that happened, it would truly be very unfortunate for the vendors operating in the US. These vendors will suddenly go out of business, which will cut the annual revenue of $1+ Billion.

It is still a small amount in comparison to the revenue generated by cigarettes. Based on statistics, Imperial Tobacco Group (one of the largest Tobacco companies) generated yearly revenue of $30.1 Billion in 2016. Though, from an economic perspective, tobacco products are taxed by the US Department of the Treasury. Cigarettes have been largely regulated, taxed, and most importantly, free from unnecessary controversies (even though they are proven to be detrimental). 

In comparison, Kratom is a natural herb. The US Economy could indeed greatly benefit from it if the unnecessary propaganda related to Kratom is canceled. It should then be made readily available for purchase after regulation and strict quality control. The taxes generated by the booming kratom business will indeed be huge (ultimately a win situation for the US Economy).

So currently, our answer to the question about kratom’s effect on the US economy is simply that it is the livelihood of thousands of vendors. If banned, these honest businessmen will lose their source of earnings and will technically become unemployed (which will eventually give rise to the unemployment rate).

The Current Legal Status of Kratom?

Currently, Kratom is largely legal in the United States on a federal level. It is perfectly legal to purchase, possess, and sell kratom. Furthermore, no prescription is required for it. However, there are some limitations in certain states.

For instance, in Alabama, Kratom is a controlled substance even though it is not a synthetic substance rather an all-natural herb. The same is the case with Arkansas. 

However, it is legal in California except for San Diego, where purchasing and selling of kratom are prohibited. Similarly, Kratom is legal in Florida except for Sarasota County where the sale and purchase are not allowed. 

It is also legal in the state of Illinois and New Hampshire but it cannot be sold to anybody who is below 18 years of age. Similarly, it is legal in Tennessee but it can only be sold to people that are 21 or older. Along with that, Kratom brands in Tennessee must also put a label regarding kratom’s effects.

If you want to know more about this subject, here is our detailed blog on the topic “is kratom legal in the US?”

Where to Buy Authentic Kratom From?

If you are planning to buy kratom, it is important to know where to look at. Due to the currently booming business and a lack of quality regulations, a big number of unreliable sellers exist in this marketplace.

So, it is important to ensure that the vendor that you are buying from is sourcing the Kratom from the best farms. Having lab tests on the company policy is a big plus!

To browse through a wide range of genuine kratom powders and capsules, visit our online store ‘Buy Kratom Bulk USA’. Our kratom comes from the top-notch sources and is specifically manufactured with strict quality control. With that, we offer very competitive prices that are just in-line with the industry standards. This has allowed us to develop a very loyal customer base.

If you want to learn more about Kratom and it’s effect on the economy, feel free to scroll through the other posts on our kratom blog section.

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