Legalization’s Social Impact: Jobs & Economy
Cannabis has been legalized for recreational use in 24 U.S. states so far, while its medical use at least in some form is regulated in almost every other state. With billions made in cannabis transactions, and millions collected as tax money, the economic gains and progress from legalization are obvious. Another aspect that should not be overlooked with legalization is job creation within the cannabis industry. In this article, read more about the social impact of legalization, in particular the effect it has on employment and economic progress.
Cannabis sales in the U.S. market are expected to surpass $32.4 billion by the end of 2024, up from $29.5 billion last year, according to BDSA cannabis analytics. In 2028, retail is expected to reach $46 billion. While established markets like California and Colorado are struggling, the fastest growth is seen in newer markets like New Jersey, New York, Connecticut, Maryland and Illinois.
Cannabis generates huge profits - in the millions - even in the smallest markets like Maine. Missouri, which only has a population of six millions, is in the top ten cannabis markets in the nation; in the first year of legalization, this market topped a whopping $1 billion in sales of adult-use cannabis goods. Another example is Michigan, which is expected to surpass $10 billions in total adult-use sales since starting the market five years ago. Wherever you look, you will find more and more of these staggering achievements and amazing figures.
The Job Machine Called Cannabis Legalization
One of the direct impacts of cannabis legalization on society is that it opens new jobs and employment opportunities, and thus contributing to economic progress. According to the Vangst annual 2024 Job Report, the cannabis industry in the U.S. currently supports more than 440,000 full-time jobs, a number that is consistently growing every year.
Between 2023 and 2024, there has been a significant 5.4% increase in job creation, or a gain of +22,952 jobs within the cannabis industry, according to Vangst. However, the opening of new job positions in the budding sector is again more prominent in newly-launched markets. For example, Michigan and Missouri have each added over 10,000 cannabis jobs in the last year. Ohio, which launched legal adult-use sales on Aug. 6, is expected to add at least 7,500 new jobs by the next summer, according to estimates from Vangst. Around 16 percent increase in cannabis job numbers has been observed in Utah as well, a state which only regulates medical cannabis.
On the other hand, early legal states such as Colorado, Washington and California are currently witnessing many problems that include market shrinking and job losses, with Colorado’s market also entering recession for the first time since legal sales began there in 2014.
When it comes to jobs, things are not perfect in Nevada either. The Silver State attracts millions of tourists annually and has some of the most extravagant dispensaries on the planet, but between this and last year it reportedly experienced a seven percent drop in cannabis job openings.
While those are dynamics seen in individual cannabis markets, legalization overall is seen as a positive factor for employment and economic growth. The economic contributions from legal cannabis are becoming increasingly more noticeable as more states join the sector and as more job creation and tax revenue takes place in the new legal markets.
How Cannabis Affects Employment and Economy and Who Benefits the Most?
According to more research, decriminalization of marijuana is associated with increased probability of employment, particularly for young males, and an average increase of 4.5 percent in weekly earnings, it’s noted in the ESSPRI Working Paper Series.
African American males experienced the greatest average wage increase, emphasizes the same paper. “Black adults, especially men, stand to benefit the most from removing these [decriminalization] penalties,” wrote the paper authors.
Another piece of research, backed by the Federal Reserve Bank of Kansas City, has looked further at the economic and social impact of state-level legalization in the period between 2000 and 2020. It remarks that there have been “moderate economic gains” from legalization, and also says that this progress has been “accompanied by some social costs” which may not be necessarily connected with legalization. It’s simply research looking at social trends and offering a larger perspective for the past two decades since legalization has kicked in.
“Post-legalization, average state income grew by 3 percent, house prices by 6 percent, and population by 2 percent. However, substance use disorders, chronic homelessness, and arrests increased by 17, 35, and 13 percent, respectively,” says the paper, titled Economic Benefits and Social Costs of Legalizing Recreational Marijuana.
“Our findings suggest that the economic benefits of legalization are broadly distributed, while the social costs may be more concentrated among individuals who use marijuana heavily. States that legalized early experienced similar social costs but larger economic gains, implying a potential first-mover advantage,” it adds.
Looking forward, cannabis is indeed expected to near a $50 billion figure in the next couple of years, and surpass sales of alcohol in some states (it has already for example surpassed sales of chocolate).
With the current trends in mind, emerging adult-use weed markets on the East Coast and in the Midwest are likely to continue their expansion and possibly reach a peak around the year 2030. These markets are projected to contribute the most in total sales increase at home in the U.S. but also abroad, around the world.
Even as early established markets are currently going through a down cycle, continued job growth in the new cannabis markets points to the industry’s resilience and its potential for economic progress.
Also read on Soft Secrets:
- Nearly 450,000 Work Full-Time in Cannabis
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Stephen Andrews
