321,000 Americans Work In Cannabis

This article was originally published on WeedWeek, and appears here with permission.

More than 320,000 Americans work in cannabis, according to a new report from Leafly and Whitney Economics. As the pandemic devastated entire sectors of the economy last year, the legal cannabis sector added 77,300 jobs, more than twice as many as it added in 2019.

The country has more than twice as many cannabis workers as dentists. The job growth, which includes plant-touching and ancillary companies, is all the more remarkable since only about a dozen states account for close to 90% of legal U.S. cannabis sales. 

The jobs growth comes as covid-induced stress and boredom contributed to 2020’s 71% retail sales jump to $18.3B. Across consumer demographics, average monthly cannabis spending shot up in March, when covid-related lockdowns began and have largely held steady since. 

Since 2017, the industry has averaged 27.5% annual job growth, which the report says is far more than any other U.S. industry. The remarkable jobs boom comes amid a pandemic which has forced businesses in many industries, including cannabis, to overhaul their operations and disrupt their hiring practices. 

State by state

While growth was universal, some states saw the number of jobs climb faster:

• Unsurprisingly, California, the world’s largest legal market with nearly $3.8B in sales, had the most cannabis jobs at about 58,000. With sales up nearly 80% last year, job growth was almost as impressive as consumers migrated to the licensed market. (California’s illegal market is still believed to account for about two-thirds of sales in the state.)
• In Colorado, the second largest state market, more than 35,000 people work in cannabis, though job growth in the state was substantially slower.
• Florida has emerged as one of the country’s largest cannabis markets, despite only being a MED state. The state gained 170,000 patients in 2020 and now has approximately 470,000 total. Last year it saw the number of cannabis jobs nearly double to 31,444.

An asterisk

One factor driving cannabis’ remarkable jobs growth that the report doesn’t go into is that marijuana’s federal illegality artificially inflates the number of jobs in the industry. Without interstate trade, and the economies of scale it allows, companies that want to operate in more than one market essentially have to duplicate their operations in each.  

Rather than shipping gummies from one factory to eight different states, companies must make arrangements for gummies to be produced under their brand in eight different states, either through factories they operate or licensing deals. This almost certainly leads to cannabis businesses employing more people than they would if they operated under the same rules as other businesses.

This may be one reason, as some observers have suggested to WeedWeek, that the ban on interstate trade could be around for a while: states don’t want to give up those jobs.

For comparison, take Starbucks, a company with operations that are similar to cannabis in some respects. Operating globally, Starbucks generated more than $23B in revenue last year, with just under 350,000 employees, slightly more than cannabis. 

Then consider Altria, the canna-curious parent company of Marlboro cigarettes. It generates more than $25B in revenue, but without low-wage service employees — budtenders and baristas — employs just over 8,000 people.

The equity gap

The new report also looks at racial disparities in the cannabis business ownership. There are an estimated 30,000-40,000 cannabis businesses in the U.S. Of these, the advocacy group Cannaclusive has put together a list of 500 Black-owned businesses. Thus Black-owned business amount to 1-2% of the industry total. (About 13% of Americans are Black.)

Female ownership of cannabis businesses also lags far behind. The report notes that of Massachusetts 260 retail businesses, one percent are black owned and two percent are female owned.

Reliable data on diversity at different levels of seniority in the cannabis workforce are not available. 

Read the original Article on WeedWeek.

Benzinga's Related Links: 

• The Cannabis Jobs Market Is Booming | Benzinga
• Cannabis Job Outlook In 2021 Is 'Strong' Despite Suffering Layoffs
• Más de WeedWeek en español en El Planteo