Where have all the cannabis jobs gone?

Vangst, a jobs platform for the cannabis industry, has just released its 2023 annual report on cannabis employment. The report shows a notable 2% drop in full-time jobs in the legal cannabis industry in the United States, bringing the total down to 417,493. This is the first year-over-year decline in legal cannabis employment since the industry’s modern legal age began in 2012, making it a surprising result.

The Cannabis Jobs Report, an annual compilation of employment figures in the regulated cannabis industry in the United States, was jointly produced by Leafly and Whitney Economics between 2017 and 2022. For this year’s report, Leafly has entrusted the task to Vangst, who takes pride in publishing the 2023 jobs report and continuing the tradition of providing reliable economic statistics and timely information. The report’s authors, Bruce Barcott, the creator of the Jobs Report, and Beau Whitney, the economist and founder of Whitney Economics, have resumed their leadership roles in preparing the report.

report results

According to the 2023 Vangst Jobs Report, the legal cannabis industry supported 417,493 full-time equivalent jobs in early 2023. This represents a 2% decrease from the previous year, marking the first time in legal cannabis history that the number of jobs has declined. The cannabis industry, which had enjoyed uninterrupted double-digit job growth for nearly a decade, halted hiring in 2022.

Despite the nationwide growth in cannabis sales in 2022, there has been a shift in the job market that has seen employment fall, despite new legal requirements promising to create thousands of jobs in 2023. Annual cannabis sales in the US increased by $850 million in 2022, a 3% increase from $25.25 billion in 2021 to $26.1 billion in 2022. It’s worth noting that this number includes all state-regulated sales for medicinal and adult use, with the exception of hemp, Delta-8, CBD, and unregulated sales.

The number of full-time equivalent (FTE) jobs supported by cannabis sales in the US varies by state legal status. In February 2023, cannabis sales supported 321,361 FTE jobs in the 19 fully legal adult-use states, while in the 21 purely medical states they supported 96,132 jobs.

What Caused the Job Drop in 2022?

The regulated cannabis industry in the United States has faced several economic challenges over the past year that have tested every company in the cannabis sector. A combination of factors including global inflation, rising interest rates, waning investor enthusiasm, lower wholesale cannabis prices, and a shift in consumer demand post-pandemic have all impacted the industry’s consistent growth. Over the past six months, nearly all major cannabis brands have been impacted by downsizing.

The cannabis industry saw a notable increase in sales during the Covid years, but as the pandemic subsided, demand fell. Millions of Americans feeling stressed and restricted at home turned to cannabis for pleasure and relief, leading to a 20% increase in nationwide sales in 2020 and 2021.

This surpasses what could be considered “natural” growth. The cannabis industry, like other key stay-at-home sectors like Netflix, Uber Eats, Amazon and Zoom, hired additional staff to meet the sudden surge in demand. However, as the pandemic began to subside in 2022, cannabis demand declined to pre-pandemic levels.

As a result, many companies felt the workforce was inadequate for the new normal. Even so, cannabis sales rose in 2022. But how can a 3% increase in sales translate into a drop in employment? Well, hiring doesn’t always follow sales in a precise pattern. While revenue is a significant factor in a company’s headcount, other factors include cash on hand, business confidence, investment capital, long-term and short-term growth opportunities, and a company’s business strategy.

In the legal cannabis industry, jobs have typically been supported by significant revenues from sales and investment capital. In 2022, however, the global investment climate had a direct impact on the industry’s hiring and workforce. In 2022, instead of hiring to expand and gain market share, companies reduced headcount to align payroll with current and projected earnings. The cannabis companies that will thrive in 2023 will rely primarily on earned income rather than investment capital.

Will job growth rebound in 2023?

In fact, job growth is expected to resume in 2023. A rebound in hiring numbers is expected in the second quarter of the year as cannabis companies become more secure and confident in their newly created revenue base.

As wholesale cannabis prices stabilize and established companies in mature markets record steady organic growth, hiring is expected to slowly pick up. On the other hand, an exponential increase in the number of employees in companies is expected in the emerging countries. We are already seeing an increase in recruitment in newly opened legal markets such as Missouri, New Jersey, New York, New Mexico, Rhode Island and Connecticut.

If policymakers in legal cannabis states work together to move consumers from the legacy market to licensed and tax-paying stores, the untapped potential in the industry, worth billions of dollars, could be realized. This could potentially lead to a resumption of double-digit hiring growth.

Diploma

Despite economic and labor market difficulties, the legal cannabis business in America offers hope for the future. The sector continues to expand and sales are increasing despite a slight job cut in 2022. This shows that there is high demand for cannabis products. While the epidemic spurred the industry, the return to normal has highlighted the value of sustainable revenue streams and ethical business practices.

The cannabis sector is expected to grow in the future as new markets develop and existing ones age. There is a significant opportunity for policymakers to support the growth of the industry while supporting the larger community through more significant tax revenues and employment opportunities as the potential for billions of dollars in untapped revenue exists.

MARIJUANA JOBS NEAR YOU, READ MORE…

HOW TO GET A SUSTAINABLE WEED JOB CLICK HERE!