How Many Jobs Have Been Created from Legalizing Cannabis?

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In 2012, Colorado Governor John Hickenlooper signed Amendment 64, legalizing the recreational possession, sale, and production of cannabis. Nearly ten years since the groundbreaking legislation, the state hasn’t descended into chaos and we have an idea of how many jobs cannabis can create. Since Colorado kicked off the movement to end cannabis prohibition, 16 states and the District of Columbia have legalized, with two more (South Dakota, Virginia) pending government activation. After almost a decade, how many jobs have been created from legalizing cannabis?

We are going to look into the policies created in Colorado, how many jobs they created, where they fell short, and what the future holds for states ending cannabis prohibition.  

CO Legalizes Recreational Marijuana

Colorado opened up the opportunity and helped create the existing model for recreational sales. Before 2021, multiple states allowed medical marijuana, but consumers were restricted by barriers such as doctor approval, application fees, and limited applications. Cannabis sales failed to reach 1 million dollars in gross revenue in the first years of medical marijuana. Sales last year surpassed 2 billion.

Opening up access means more taxable revenue and extensive job creation. Looking at the total jobs created by the cannabis industry is difficult. A study published in the Journal of Regional Analysis and policy found that ‘post-legalization correlated with 51,000 extra hotel rooms rented per month in Colorado. That figure jumped to an additional 120,000 hotel rooms rented per month once tourists could purchase marijuana legally.’

Just looking at the industry jobs doesn’t give us a full picture of exactly how many jobs are created from cannabis legalization. An increase in tourism has an enormous effect on a local economy. Calculating how many restaurants, head shops, bars, concert venues have opened or been able to stay open because of cannabis legalization is nearly impossible, so we are going to only review jobs created by cannabis businesses.  

How Many Jobs Created in Colorado from Legalizing Cannabis?

Leafly reports that at the beginning of 2020 (before the cannabis industry was deemed an essential business and expanded even further), Colorado had just over 34,000 legal cannabis jobs. Colorado came in 2nd only to California’s jobs totaling 39,804.

Lessons from the Past

Colorado’s legalization roll-out has been widely considered a success. Being the first state to make such a major change comes with the risk of being a complete failure and national embarrassment. Colorado has accomplished giving more people access to cannabis in a generally safe manner, while lowering alcohol DUIs, adding jobs, and increasing tax revenue. They did make some key mistakes in Amendment 64 that limit the total job potential in the industry.

Possession Limits – In Colorado, a local can only buy and possess up to 1 ounce. Out of state visitors are limited to a quarter ounce.

Public Consumption – The tourism industry could have expanded even further if Colorado would have allowed places for people to smoke. Right now, cannabis is only legal to smoke in a personal residence or if you have the owner’s permission.

Private Commercial Consumption – Allowing the cannabis companies to open up club-like environments where smokers are allowed to consume socially was a huge, missed opportunity from the first state to legalize recreational marijuana.

Limited Licenses – Broad sweeping restrictions on who can and can’t get licenses have hurt the people most affected by cannabis prohibition. The job numbers are also greatly affected by restricting people with criminal records (even for cannabis) from holding a job in the industry.

While there have been some shortcomings, Colorado will forever be remembered as the first state to legalize cannabis in the United States. The industry has racked in a total of 10 billion dollars in sales and over 1.5 billion in tax revenue since recreational marijuana was legalized.

What Types of Jobs are Created

When we think of legal cannabis jobs, most of us immediately think of a budtender or a farmer. Because the cannabis industry is so diverse, there are far many more types of jobs created by legalization than growing and selling cannabis.

The extraction industry alone consists of hundreds of companies with some only specializing in particular aspects of the process. We forget about the companies who create the equipment, the labs that test the product, the quality control regulators, all adding jobs to the economy and providing a stable income for residents.

Beyond the Budtender

The total legal cannabis job numbers don’t include the jobs that assist businesses. Strict government regulations require companies to hire lawyers and tax professionals who are familiar with the cannabis laws. Marketing agencies and advertisers can cater to the industry and not be considered a cannabis job by the department of labor.

Cannabis legalization reaches far more industries than retail and production. We have to also consider the businesses taking in revenue generated by cannabis sales.

Jobs Created by Tax Revenue

When a state legalizes cannabis, they include a 10-20% tax on all sales. The revenue is given back to the community to help expand drug treatment, education, infrastructure, and other government programs. Jobs created by the tax revenue are also not included in the total tax dollars. Cannabis is not only helping repair communities affected by prohibition but is generating social work jobs vital to community development.

Cannabis Jobs of the Future

The US currently has 321,000 legal cannabis jobs. 2020’s job growth doubled from 2019. While many industries were crushed by the coronavirus pandemic, the cannabis industry thrived. There is still an incredible amount of untapped potential.

Taking in the lessons from Colorado, New York has created the most progressive cannabis legalization legislation to date, expanding the amount locals can purchase, opening up licensing and employment for a broader pool of candidates, and legalizing marijuana consumption clubs. Going forward, states will take into account the improvements made by states like New York and build on those areas to maximize job growth.

SOURCES

https://www.benzinga.com/markets/cannabis/20/05/16096254/study-legalizing-marijuana-results-in-major-tourism-spike

https://www.thecentersquare.com/colorado/colorado-has-34-700-legal-cannabis-industry-jobs-study-finds/article_de2218b4-9aa6-11ea-b84e-77249a242074.html

https://www.leafly.com/news/industry/cannabis-jobs-report

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