How Growing Marijuana Legalization Could Affect the Economy

Continued recreational legalization of the drug could have far-reaching implications for the economy.
Marijuana labor market

After the 2016 U.S. election, a total of 28 states have now legalized medical marijuana, along with eight other states and Washington, D.C., that have approved recreational sale and use. The legal marijuana sector currently employs around 150,000 people and is one of the fastest-growing industries in the U.S., according to CNBC. With recreational use of the drug expected to expand to other states in the coming years, how will the continued rise of the sector influence the labor market?

The impact could be widespread. Cannabis, the species of plant that produces psychoactive effects, comes in a variety of products, including cookies, candies, drinks, sprays and lotions. “It never ceases to amaze me how creativity is intersecting with this market,” said Adam Stites, founder of Mirth Provisions, a company that makes cannabis-infused products based in Longview, Washington. Sales from these products all see high taxes in states where they’re legal.

In Colorado, marijuana excise and sales taxes combined were $121.2 million in 2015, according to the Marijuana Policy Group’s The Economic Impact of Marijuana Legalization in Colorado. This will surpass cigarette revenues by 2020, the report said. The MPG study went on to find that with each dollar spent in retail marijuana yields $2.40 in state economic output in Colorado.

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“The economic boost that’s provided by the marijuana industry is really significant when it comes to related industries,” said Morgan Fox, senior communications manager at Marijuana Policy Project, a nonprofit organization focused on marijuana legalization and education in Washington, D.C. For instance, with the growth of a new retail industry, more people are likely to buy cash register systems, use web designers and hire electricians and security personnel.

Moreover, as more growing operations and retail locations open, previously empty warehouses are likely to fill, providing a potential spark to the commercial real estate and construction industries. Some office spaces are even opening for “marijuana business incubators” in the Colorado cities of Boulder and Denver, according to the MPG study, which dubbed the area “Cannabis Silicon Valley.”

For others, the rise of the legal marijuana industry could spark a change in how companies view employees’ consumption of the drug and related products. “Over time, when marijuana is legal and becomes more normalized in a society, that cannabis will in fact act as a substitute more so than as a complement to alcohol,” said Paul Armentano, deputy director of National Organization for the Reform of Marijuana Laws, or NORML, a nonprofit lobbying organization for marijuana reform based in Washington, D.C. Excessive drinking cost the U.S. $249 billion in 2010, according to the Centers for Disease Control and Prevention.

This cost includes loss of workplace productivity, crime and treating people for health problems from drinking. Savings in this area could mean improvements in absenteeism, overall health and productivity from workers. The same goes for opioid overdoses, which kill an average of 91 Americans per day, according to the CDC. With marijuana, opioid users tend to reduce or quit the addictive and dangerous habit, which Virginia declared a public health emergency in November.

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Because of facts like these, MPP’s Fox hopes that companies will stop drug testing for marijuana. “As companies start to realize that where marijuana is legal, it’s safer than alcohol and has less deleterious effects on people’s productivity and their long-term health. Companies that continue to discriminate against marijuana consumers are going to have problems with staffing, whereas companies that grow with the times are going to have a lot more options.”

Those that faced prison charges due to marijuana-related offenses could also potentially be back in the labor market in states that have made the drug legal. “As an employer, having a marijuana conviction on an applicant’s record is something that should more or less be ignored,” Fox said.

Still, caveats remain. Marijuana remains illegal under federal law, and some in the industry fear that it could soon be shut down at the federal level, making the future of the industry difficult to predict. “It’s hard to speculate too far forward,” Armentano said.

Insights on Hiring in the New Industry

When Mirth Provisions’ Stites looks for talent, he mainly looks at work ethic. Because the industry is so new, there isn’t a lot of experience among those being hired. As far as industry background, Stites said he has yet to see a pattern. But the skills needed aren’t much different than other markets. “This industry didn’t really exist a couple of years ago, so that creates a new host of challenges in being able to quantify the competency for a given role,” Stites said.

Other companies can quantify those skills through training programs. Rosie Yagielo, president of HempStaff LLC, a marijuana recruiting and dispensary training company based in South Florida, teaches courses for the medical marijuana industry. The biggest thing she teaches is professionalism. Because most states have only legalized medical use, most of the dispensaries act as de facto doctor’s offices. Naturally, there is a lot that goes on behind the scenes in regards to growing the plants, but these are specific to the marijuana industry. “I don’t think they will change over time. I think these positions are what they are,” Yagielo said.

These are the main jobs currently in the marijuana industry, via HempStaff:

  • Master grower: This worker oversees the construction and design of the grow operation, follows a grow schedule and keeps daily records about chemicals and lighting.
  • Cultivation supervisor: This person oversees growing and trimming of marijuana plants.
  • Trimmer/cultivation site worker: These workers manicure and prepare the marijuana plants.
  • Extractor: They use the marijuana to make hash or concentrates. This job requires knowing the technical process and taking safety precautions.
  • Budtender dispensary agent: This worker knows about different strains and how they alleviate symptoms of various illnesses.
  • Cannabis chef: They must know how to infuse food with cannabis.
  • Dispensary manager: This important person interfaces with staff, law enforcement, vendors and landlords. They coordinate transactions of the dispensary, maintain records, contact grow sites, understand marketing, train workers, educate patients and keep up with state laws.
  • Lab workers: They test the products to ensure they’re free of pesticides and heavy metals, and that they contain the right amount of cannabinoids (THC and CBD).
  • Marketing/sales associates: They get the brand out to market, create logos and make sales.
  • Security: On-site guards keep employees and patients safe. This worker rides with the dispensary manager to the bank for cash deposits.
  • Delivery driver: The driver delivers product to patients, so they must have good people skills. This worker can’t be impaired while driving.

Lauren Dixon is an associate editor at Talent Economy.

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