Legal cannabis dispensaries increases employment rates In Colorado counties

Bethan Rose Jenkins, Cannabis News Writer/Editorial

While skeptics might have thought that the legalization of high-potency, couch-locking weed might trigger a wave of unemployment, a team of researchers from the University of New Mexico have drawn quite the opposite hypothesis. 

According to the findings of a recent study published in the IZA Journal of Labor Economics, the legalization of adult-use cannabis in Colorado boosted job opportunities and did not have a negative impact on employee productivity.

The researchers who analyzed eight years of data from the State of Colorado, where adult-use cannabis was legalized in 2012 were intent on learning more about the repercussions of a legal market ahead of New Mexico’s recreational sales launch, which is expected to commence in April of 2022.

Moreover, the team of researchers discovered that unemployment sank in counties that were serving consumers through legal dispensaries, in comparison with counties that were still waiting to begin serving customers via retail outlets.

“In terms of jobs, it is clearly the counties with the recreational dispensaries that benefited most after Colorado legalized adult-use cannabis,” said study co-author Avinandan Chakraborty in an official press release.

Colorado’s cannabis retail stores contributed to rise in employment: How was the study conducted?

In order to glean their findings, researchers analyzed county-level Colorado data that extended from the years 2011 to 2018. Furthermore, the research team focused on any fluctuations pertaining to unemployment rate, employment and wages. These factors were assessed by industry subsector and on an overall basis.

What the team discovered was that unemployment rates plummeted when dispensaries opened their doors. This, they say, was stimulated by a 4.5 percent surge in employment, as opposed to a lack of labor force participation.

It’s important to note that the authors did not pull any solid proof from their findings that cannabis legalization in Colorado contributed to a rise in wages or workforce participation. With that being said, the study authors theorize that rising employment rates stem from unemployed and self-employed workers, as opposed to employees transferring from other industries.

Overall, the findings in this paper provide evidence that recreational cannabis dispensaries improved county-level labor market conditions in Colorado.”

Colorado’s cannabis retail stores contribute to rise in employment: Study was first of its kind

The team of authors responsible for reporting on the study’s findings including a researcher from California Polytechnic University claim that this is the first-published study into the repercussions of recreational cannabis legalization on labor market consequences (after disability claims.)

The influence that Colorado’s cannabis legalization has had on labor market participation is attributed to the thriving state’s “long supply chain that includes cannabis cultivators, extraction services, product manufacturers, testing facilities, distributors and retail stores,” say the researchers.

They added that technological advancements in the CBD/THC concentration and extraction segments of the market are also stimulating cannabis industry job growth.

Since methods of cannabis production are usually “labor-intensive, with, e.g., hand-trimming of individual cannabis flowers is still common among commercial cultivators,” as the study authors say, much of the industry’s growth is likely influenced by “new, legal entities.”

“Our results suggest that policymakers considering recreational access to cannabis should anticipate a possible increase in employment.”

Something else that the authors discussed was the benefits of this research for U.S. states (like New York and New Jersey) that have recently legalized the plant for adult-use purposes, but have outlawed cannabis businesses.

Our results suggest that, by preventing counties from banning dispensaries, New Mexico’s approach to legalizing cannabis will yield more widespread employment benefits than those experienced in Colorado,” study co-author Sarah Stith concluded. “In fact, we may already have begun experiencing some of the benefits as producers begin preparing for dispensaries to open in April 2022.”