State’s Legal Cannabis Industry

California had about $2.47 billion in legal cannabis sales in 2018 and the industry supports nearly 67,000 full-time jobs, according to a study released Tuesday by Whitney Economics.

That job total breaks down as 47,822 direct jobs, 7173 indirect jobs and 11,956 induced jobs, which are those jobs created by the economic influence of the industry such as where employees spend their money or what tax dollars support.

The report states that when the state marijuana industry reaches maturity, “California should be a $6 billion to $8 billion annual market.” However, the report concludes that the state is nowhere near reaching that maturity, largely due to the continued influence of the illegal market.

“We’re years away from a mature market in which most consumers have finally migrated from the illicit to the legal, licensed industry,” the report states.

“California cannabis saw massive shakeups in 2018, with many unlicensed dispensaries shutting down, some licensed adult-use stores opening up, and lots of towns and counties banning cannabis businesses altogether,” the report states.

Solano County is one of those counties that has banned any kind of commercial cannabis operations in the unincorporated areas.

“Given all the upheaval, we identified 2018 as a year of stasis for California and estimate $2.47 billion in sales. Patients and adult consumers didn’t go away; they’re merely adjusting to the new reality. As a result, our job tally in California is just a slight increase from last year’s count.”

Some cannabis dispensary owners have, in the past, noted a decline in sales due to the combined weight of local and state taxes on their businesses.

One of them said in February 2018 that he lost nearly a third of his customers after the taxes that were imposed by the state at the start of the year raised the total on his products to 33 per cent. That represented the 15 per cent state tax, a 10 per cent city tax on the cannabis products and the general sales tax.

Overall, the cannabis industry supports more than 211,000 full-time workers nationwide, a gain of 64,000 jobs during 2018, the report states. Most of those gains are in states that have more recently legalized marijuana use, such as Nevada, which added 7500 jobs in 2018 and had first full-year sales totaling $608 million.

Marijuana advocates, such as the National Organization of Reform of Marijuana Laws, are using the report to support its long-held assertion that marijuana needs to be removed by the federal government as a Schedule I narcotic.

“The federal government needs to de-schedule marijuana to allow states to better and more fully benefit from the economic growth engine that is the legal marijuana industry,” NORML executive director Erik Altieri said in a statement released with the Whitney report.

“Further, state regulators need to ensure as this sector expands its economic benefits are shared by all, including and most especially by those who suffered most under the failed policy of criminal prohibition,” Altieri said.

Altieri will join U.S. Reps. Tulsi Gabbard, D-Hawaii, and Don Young, R-Alaska, at a press conference when they are expected to announce the introduction of two bipartisan bills.

One, The Ending Federal Marijuana Prohibition Act of 2019, would remove marijuana from the federal Controlled Substances list and give states more regulatory freedom.

The other, The Marijuana Data Collection Act of 2019, would study the effects of “state legalized medicinal and non-medicinal marijuana” on state revenues, public health, substance abuse and opioids, criminal justice and employment.

Written by Todd R. Hansen