Updated from 9:18 a.m. EST with information on Uruguay's pending legislation in the final paragraphs.

NEW YORK (TheStreet) -- The economics of legalizing marijuana for recreational use has several states watching Colorado and Washington to see if revenue can grow like a weed. The latest member of the club is Portland, Maine, which just legalized pot within the city limits. A city ordinance went into effect on Friday, Dec. 6 that allows possession up to 2.5 ounces. It's the first city on the East Coast to legalize recreational use of marijuana.

"It's like the onset of casino gambling," says Alan Bochstein, founder of the 420 Investor. Colorado and Washington are the first states to legalize recreational use of marijuana and the money is as green as the weed.

Colorado's Amendment 64 was expected to save $12 million a year for reduced criminal costs and generate $32 million in new revenue. Washington state says it can save $23 million a year on criminal costs, but thinks the business could deliver up to $530 million, a much higher number than the other states partly because it includes marijuana tourism estimates.

All in all, it's no wonder other states are jonesing for this new found revenue.

The states are approaching legalization from two different angles: medicinal use and recreational use. States using the medicinal marijuana approach employ varying degrees of enforcement. Illinois passed a medical marijuana bill that is one of the strictest in the country. Patients can't just go to a "doc in a box" for a patient card, they have to be a long time patient of a doctor to receive their card. California is known for its very lax medicinal enforcement where a headache qualifies you as a patient.

Quite a few states are entering the medicinal arena, including:

Minnesota -- This state had several bills introduced this year. Senate Bill 1641 permits medical marijuana and authorizes cities to enact zoning regulations to address dispensaries. House Bill 1818 also permits medical marijuana use and authorizes rulemaking and fees. A separate measure, House File 508, doesn't legalize marijuana, but instead gives a defense for medicinal use.

New York -- Where you can smell the chiba wafting as you walk down the city streets. Newly elected New York City Mayor Bill DeBlasio is in favor of legalization. Two Senate Bills and one Assembly Bill were filed this year. SB 1682 legalizes pot possession of up to eight ounces and is mostly concerned with organizations, while SB 4406 and Assembly Bill 6357 deals with the patients.

Pennsylvania --  The Keystone state may become the Key Stoned state. It has both a Senate Bill 770 and a House Bill 1181 that provide for the medical use of marijuana.

Meanwhile, other states are skipping the medicinal route altogether and jumping right into recreational. 

Here are the next states expected to say "don't bogart that joint."

Alaska -- John Davis, founder of the Northwest Patient Center says the polling is there to support it, with 54% in favor. Alaska removed the penalties for possessing pot in 1975, so they were ahead of the game. But then in the 1990s an anti-cannabis law was passed, but it wasn't enforced. The Marijuana Policy Project is gathering signatures in Alaska to qualify an initiative for the August 2014 primary election that would make possession legal and regulate it in a similar fashion to alcohol. "A lot of people just realize the writing's on the wall," said Davis.

Arizona -- This conservative state only has 37% of the population opposing decriminalization, with 56% in favor. It was the 15th state to approve marijuana for medicinal purposes. Initially Gov. Jan Brewer opposed it, but then relented. Arizona politician and former marine Ruben Gallego announced he will introduce legislation to legalize marijuana for those 21 and older next year. Davis said most supporters prefer the legislation to land in a presidential election year, because they believe this brings out the youth vote. However, in states where the polling more heavily favors legalizing recreational use, they are pushing to get into the 2014 elections.

California -- A new poll by San Francisco-based Tulchin Research shows a majority want to relax laws against marijuana use and tax it, with 65% in favor of legalization and regulation. This state shows how quickly the public is accepting the idea because in 2010 only 53% felt that way. California has already benefited financially from medicinal marijuana which has potentially raised more than $100 million a year in tax revenue for the state, according to th California Board of equalization. The ACLU announced a new panel headed by California Lt. Gov. Gavin Newsom to draft a possible 2016 ballot measure, preferring to wait for the presidential election year.

Oregon -- In November, Oregon's Senate Judiciary Chairman Floyd Prozanski presented legislation that would ask voters if they wanted to legalize marijuana for adults 21 and over. There was already an initiative filed with the elections division that would skip the step of having to gain signatures to qualify the issue for a voting ballot. If the state goes the legislative route, it would cover rules and regulations, like oversight and taxation. Either way, it looks like Oregon is moving full steam ahead.  

There are a few states bucking the trend. Montana, for instance, remains a question mark. Davis believes Montana will follow its western brothers, but the state is actually passing very strict driver impairment laws. Davis said that a majority of voters support decriminalization; however the legislators are actively working against easing its strict medicinal laws.

Illinois passed a medical marijuana bill that is one of the strictest in the country, issuing cards only to those who are longstanding patients of the prescribing doctor. Reversing course entirely, Ohio introduced House Bill 153 that actually repeals the medical use of marijuana.

Once more states go recreational, the next big hurdle for the green revolution will banking. Most marijuana growers and dispensaries can't currently take standard business deductions for a cannabis company according to tax provision 280e. Then, there's the simple issue of daily banking. Marijuana is still considered a controlled substance by the Federal government.

Banks aren't morally opposed to dealing with these customers says Davis, but its small potatoes to them and they don't want to anger their regulators for a miniscule piece of business. That may begin to change since Bank of America (BAC) said it would take pot revenue in Washington. They just said "yes."

The first country to join in the legal pot business looks to be Uruguay. This country is set to vote on a measure establishing a national regulatory body and official controls for the legal use and sale of marijuana on Tuesday, Dec. 10. Uruguay President Jose Mujica believes that if the government regulates the business of marijuana it will reduce the crime associated with the illegal aspects of the drug. If the bill passes, it will take another 120 days for the government to write regulations ahead of implementation. 

Other countries have decriminalized the use of marijuana but Uruguay is the first to create a regulated national industry.

Of course the country stands to reap tourism dollars for those traveling to the country, even though the government insists only Uruguay citizens will have access to the drug. However, if Amsterdam is any indication of what Uruguay can expect, then the tourists will come. Ninety percent of the people that smoke marijuana in cafes in Amsterdam are foreign tourists. Put that in your pipe and smoke it.

-- Written by Debra Borchardt in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Stocks

Dow Futures Tank as Trade War Fears Grip Wall Street

Dow Futures Tank as Trade War Fears Grip Wall Street

Why GE's Stock Has Fallen 9% in the Last 30 Days

Why GE's Stock Has Fallen 9% in the Last 30 Days

5 Stock Picks Under $10 for Millennials

5 Stock Picks Under $10 for Millennials

3 Complicated Investing Strategies Millennials Love

3 Complicated Investing Strategies Millennials Love

Tyson Foods CEO: We Aren't Done Making Deals

Tyson Foods CEO: We Aren't Done Making Deals