As the 2024 elections draw near, the economic impact of cannabis legalization is set to become a prominent topic in political discourse. With billions in total sales and millions in tax revenue, the economic benefits of legal cannabis are clear. However, beyond the monetary gains, there is a crucial aspect that must not be overlooked: job creation.
The 2024 Cannabis Jobs Report by Vangst reveals that over 440,000 jobs have been generated in states with legal cannabis, marking a 5.4% increase in the past year alone. This growth not only signifies economic stability, but also highlights the industry’s resilience in recovering from past job losses. As new markets like Missouri contribute to this job surge, the report underscores the varying dynamics of job creation across different states: newer markets are expanding while older ones face challenges. Despite these disparities, the forecast remains optimistic, with continued growth in sales and job opportunities anticipated in the coming years.
The economic benefits of legal cannabis
When discussing the economic benefits of fully legalizing cannabis, the subjects of total retail sales and related tax revenue are always immediately discussed, and rightfully so. Forbes estimates that the regulated U.S. cannabis industry will be worth $46 billion in 2028, and will surpass alcohol sales in some counties. Even in more remote and less populous states, cannabis has brought in millions in retail sales and tax revenue. In Maine for instance, cannabis sales reached $217 million in 2023. Missouri, despite a population of roughly six million, was the sixth largest market of all the states with legal cannabis in 2023. In all, Missouri topped $1 billion during its first year of recreational sales.
Job creation in the cannabis industry
As we approach the 2024 elections, cannabis will undoubtedly be an issue on the forefront of discussions. The rapidly increasing, multi-billion dollar figure of total cannabis sales and many millions more in tax revenue will be mentioned prominently. However, when discussing the numerous economic benefits of recreationally legalizing cannabis, politicians who run so heavily on platforms of American job creation, such as the reality TV star turned President, must also acknowledge the thousands of jobs that are created annually from states with legal cannabis.
Recovery and growth
One partial reason identified by the Vangst Report for the dramatic increase in 2023 cannabis jobs, is that cannabis industry overall experienced a loss of about 10,500 jobs from 2022 to 2023. Not only were industry businesses actively creating new roles for prospective employees by the thousands in 2023, they were recuperating from a deficit of job loss. Luckily for this flourishing industry, the legalization and opening of the recreational cannabis market in Missouri easily filled those 10,500 previously lost jobs for their billion-dollar industry.
State-by-state analysis
One noteworthy data set in the Vangst Report was precisely which states’ markets were creating more jobs, and the ages of various state markets in relation to job creation performance. Of the top nine states for cannabis job growth, three saw increases of over 100 percent; and none of those states had legal cannabis before 2018. One of those states, Utah, experienced a growth of about 16 percent, but is still a strictly regulated medical-only market. Even more surprisingly, Utah is the only state that could even be considered “West Coast” among the top nine.
Interestingly and worryingly, the eight states to experience the most staggering job loss all legalized cannabis at least a decade ago. On top of the mountain of issues that the California industry is already facing, the Golden State experienced the highest number of job losses in the past year. Neighbor state Nevada, despite attracting over 40 million tourists a year, experienced a seven percent job numbers drop. Colorado and Washington, the very first two states to legalize recreational cannabis in 2012, experienced the highest percentage of job loss by far, at 16 and 15 percent respectively.
“The national 5.4% growth in jobs wasn’t spread evenly. Now more than ever, America’s cannabis industry is a state by-state, region-by-region job market.” the Vangst Job Report summarized. “Young markets in recently legalized states continue to expand and create employment opportunities, while labor demand in mature markets contracts along with revenue and profit margins.”
Future projections
Even with the notable stagnation or job loss in the thousands for certain states, the report indicates hints of future job growth. Vangst estimates that anywhere from 7,500 to 45,000 jobs could be created in Ohio, for example, which recently legalized adult use cannabis. Out east, With Maryland awarding 75 more retail cannabis licenses, the number of jobs created in that state would almost certainly increase. Overall, the Vangst Report hypothesizes another wildly successful year for cannabis sales.
“In 2023 our legal revenue forecast of $29.2 billion came in at $28.8 billion (98.3% accuracy). This year we’re looking for 9.1% growth, with sales increasing to $31.4 billion. By 2030, we predict this will grow to $67.2 billion as more states legalize and more consumers participate. That growth will create more jobs, more wages, more taxes, and more ancillary support. Despite the challenges, this seems like a good problem to have as an industry.”
Conclusion
As the cannabis industry continues to evolve and expand, its economic contributions are becoming increasingly significant– particularly in terms of job creation and tax revenue. Job growth underscores the industry’s resilience and potential to create economic opportunities, even as older markets face challenges.
As the 2024 elections approach, it is imperative for policymakers to recognize and address the multifaceted economic benefits of cannabis legalization, ensuring that discussions extend beyond sales and taxes to include the vital aspect of job creation. With projections indicating continued growth in sales and employment, the cannabis industry stands as a dynamic and promising sector, one poised to make significant contributions to the American economy in the years to come.