Nearly 450,000 Work Full-Time in Cannabis

The 2024 Vangst Jobs Report claims that there are now 440,445 full-time jobs in the legal cannabis sector in the U.S. This figure represents a 5.4% year-over-year increase, and it indicates that the industry is doing well even when things around are far from perfect. 

Jobs Growth Largely Driven by Midwestern States

The national 5.4% growth in cannabis jobs has not been evenly spread, needless to say. More than ever, the American cannabis sector is a state-by-state, region-by-region job market, the report authors wrote. 

Growth principally owes to the newer markets while the more established markets are still undergoing a period of contraction or are eventually stabilizing. Established markets continue to experience lack in labor demand, as well as decline in revenue and profits, the report said.  

Between 2023 and 2024 market growth was most noticeable in the newer Midwestern markets, such as Michigan, Missouri and Illinois. Moderate growth has been seen in the East Coast markets like New York, New Jersey and Connecticut. 

The situation in the West coast looks significantly different, however. Price compression, oversupply, dense market and unlicensed sales have led to a decline in annual sales and the loss of thousands of jobs, according to the report. 

Overall, annual sales of cannabis have increased. The data, which was compiled by both Vangst and Whitney Economics, shows that annual sales of weed went up to $28.8 billion in 2023. Which is more than 10% year-to-year growth. The figure includes all state-regulated medicinal and recreational retail, without hemp. 

“After a rough 2022 that saw a contraction of more than 10,000 jobs, sales and hiring stabilized and began trending slightly upward in the second half of 2023,” the report notes. “Not all job markets expanded equally. Below the surface, a complex mix of factors were at play.” 

While the cannabis industry “sailed steadily” during the pandemic, the authors of the report have remarked that the sector is struggling with today’s challenges. “The current era of high interest rates and expensive capital has hit cannabis with full force,” the report underlines. 

“Cannabis companies nationwide are delaying expansion due to the high cost of debt. As the Federal Reserve indicates it may start lowering rates in later 2024, it’s tough to justify locking in a loan at today’s high rates when cheaper money may become available a few months down the road,” it says. 

Beyond that, vendors have a practice to delay invoice payments so they can settle short-term costs. They are also required to pay local, state and federal taxes, which additionally lessens their ability to hire more personnel. 

Still, things look brighter than they were in the last two years. In 2023, the jobs report for the first time noted that there were companies that had to cut over 10,000 jobs, something that had never happened before. Between then and now this scenario has not repeated, fortunately. 

The Vangst and Whitney report predicts that markets such as Colorado which had particularly difficult periods recently are finally entering a more stable cycle. Slow-growing markets such as New York and Ohio will strengthen. If we also see lower interest rates in the later half of 2024, that will provide more cash opportunities for companies to expand and make new hires. 

The one factor that remains an enigma? As always, it’s whether and if anything happens with federal reform. Elections are nearing and everyone is still waiting for the outcome of the ongoing review process for rescheduling marijuana under the Controlled Substances Act. That might be a game-changer for everything, as it might be the long-overdue banking reform or even legalizing marijuana after November. 

Also read on Soft Secrets:

- Business Licensing in the U.S. Declined in 2023

- THC Inflation is a Big Problem!

- The State of Diversity in the Cannabis Sector