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Marijuana: Growth Labor Market

By admin_45 in Blog Marijuana: Growth Labor Market

By DataTrek co-founder Jessica Rabe

What’s the fastest growing labor market sector in the US? No pun intended, but it’s the legal marijuana industry, according to a new report by cannabis website Leafly. The Bureau of Labor Statistics does not track this data because marijuana is still illegal federally, so the work here is a useful look at how this disruptive industry impacts US employment.

Leafly teamed up with Whitney Economics, which “has gone state-by-state to tally the total number of direct, full-time jobs in the state-legal cannabis industry.” Here were their findings:

  • There are currently +211,000 marijuana jobs in the US. Additionally, “when indirect and induced jobs are added, the total number of full-time American jobs that depend on legal cannabis rises to 296,000.” 

    To put this in context, that’s more than the 52,000 coal mining jobs in the US, as well as 69,000 brewery workers and 112,000 in textile manufacturing.
  • Over 64,000 marijuana jobs were created last year, or 30% of the total.The report notes “that’s enough people to fill Chicago’s Soldier Field, with 3,000 more tailgating outside.”

    Credit California – with a population of nearly 40 million – which started allowing dispensaries to sell recreational cannabis in January 2018. The report expects this state to add another +10,000 marijuana jobs this year. High taxes have kept many consumers from switching over to legal stores from the black market, but legal marijuana jobs here have still grown at a steady clip.

    Moreover, job growth in this industry stays strong for many years after legalization: “It’s been five years since Colorado and Washington opened their first adult-use retail cannabis stores, and we’re just now seeing a slowing in the rate of cannabis job growth in those two states.”
  • The US marijuana workforce rose 21% in 2017 and another 44% in 2018. Going forward: “If cannabis job gains follow on at a conservative 20% in 2019, that will represent a 110% gain in full-time jobs in three years.”
  • Both recreational marijuana sales and states building out their medical marijuana industries have contributed to jobs growth. For example, Florida added the highest number of full-time marijuana jobs last year versus other states. The state’s medical marijuana industry had 10,358 direct full-time jobs as of January 2019 versus 1,290 in January 2018. That’s because Florida’s medical marijuana patient population “grew from roughly 65,000 to 165,000 in 12 months.”

Three summary points on all this:

#1 – At a macro level, we continue to highlight how further gains in the US labor market will come down to employers’ willingness to hire someone without a 4-year college degree and (separately) what types of jobs the economy creates. Americans with a college degree are basically at full employment, but most Americans do not have those credentials and their participation rates are lower than the former. The marijuana industry offers solid paying positions at all levels of experience and educational attainment. 

Glassdoor even found that the median paycheck in the marijuana industry is 11% above the U.S. median salary of $52,863. Here’s some popular marijuana jobs and their salary/hourly wages that range in skill level:

  • Budtender: $12-$16 an hour
  • Dispensary store manager: $41.5k-$98k
  • Compliance manager: $45k-$149k
  • Director of extraction: $47k-$191k
  • Director of cultivation: $47k-+$250k
  • Trimmer: $11.50-$14.50 an hour
  • Outside sales rep: $28k-$150k

#2 – Jobs growth in the marijuana industry will accelerate and grow in importance as more states allow recreational cannabis sales.

New Jersey and New York are trying to legalize recreational sales, and already have 2,350 and 5,067 workers in their medical cannabis markets respectively. Washington and Colorado have 33,591 and 31,486 respectively, with populations of just 5 to 7.5 million. New Jersey (population of +9 million) and New York (+19.9 million) are some of the US’s most populous states with major cities and their marijuana markets will eventually employ tens of thousands of people.

Michigan was also the 10th state to legalize recreational marijuana and sales are expected to start in early 2020. While adult-use of marijuana is legal in Vermont, a bill is still working its way through its legislature to legalize sales.

Bottom line, medical marijuana is legal in 34 states and recreational marijuana is currently legal in 10 states. As more states legalize both, the marijuana industry could eventually employ millions of Americans.

#3 – Given Americans’ growing reliance on marijuana jobs as a source of income, it’s going to put more pressure on the federal government to address banks’ concerns about taking on marijuana-related businesses as customers. They view it as too risky since marijuana is classified as a Schedule I drug, forcing the industry to conduct business mostly in cash. This dynamic has posed serious security risks including robbery as dispensaries hold a lot of cash onsite.

Congress recently held a hearing for a proposed bill that would protect banks with marijuana-related customers, at which politicians and industry advocates voiced concern for dispensary employees who get paid thousands of dollars in cash. The bill won’t likely pass in the Senate since it’s controlled by Republicans, but you can read our take on the hearing and bill here:

Summing up: US marijuana legalization is a rare example of disruption creating jobs rather than destroying them. With the US labor market recently showing signs of weakness and fears of an eventual recession in the wings, this is one industry that might soften the blow of an economic downturn.


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