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Marijuana-related jobs growing but largely hidden

By
Jean Lotus
Economists are trying to capture the economic benefit of jobs created by the marijuana industry. File Photo by Jim Bryant/UPI
Economists are trying to capture the economic benefit of jobs created by the marijuana industry. File Photo by Jim Bryant/UPI | License Photo

DENVER, June 27 (UPI) -- A cannabis-related job boom in the United States is not showing up in government employment data, leaving American workers in the dark about high wages and job opportunities in the marijuana industry, experts say.

"Legal cannabis [recreational and medical] is America's greatest jobs creator right now," said Bruce Barcott, deputy editor of Leafly, an online magazine devoted to the cannabis industry. "The problem is it's untracked by the federal government, and state governments all have their own systems" for reporting.

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Leafly and Portland, Ore.-based economist Beau Whitney released a state-by-state analysis of marijuana jobs and revenue in March that showed the industry has taken hold.

Part of the problem with tracking marijuana's financial weight in the economy is that the drug still is illegal on the federal level. The U.S. Bureau of Labor Statistics reports lump any jobs in the cannabis industry in unspecified categories such as "agriculture," "manufacturing" and "retail sales."

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Barcott said that obscured 211,000 cannabis-related jobs in the United States in 2018 in what he calls one of the country's fastest-growing sectors.

The Bureau of Labor Statistics lists industries with the fastest-growing jobs in its Occupational Outlook Handbook, but the marijuana business is missing. So the magnitude of its growth and potential growth cannot be determined, at least from U.S. government data.

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Readers do learn that solar voltaic installer jobs are expected to grow by 105 percent over the next 10 years. Home healthcare aide jobs are expected to grow by 47 percent. And wind turbine technician jobs are expected to increase by 96 percent during that time, according to bureau projections.

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Cannabis-related jobs have increased 110 percent in just three years and are expected to keep growing, Barcott said. Excluding those jobs from Labor Department lists withholds information that could help Americans map out their careers, he said.

Another barrier to reporting is that the industry is new. Codes and categories tracked by federal labor and census agencies are updated every five years by the White House-controlled Office of Management and Budget. The North American Industry Classification System tracks workers in hyper-specialized fields, for example, differentiating strawberry harvesters from grape harvesters.

Separate categories have not been created for marijuana industries, nor for industrial hemp jobs. Federal limitations on hemp cultivation and the plant's status as a Schedule 1 drug were removed by the 2018 Farm Bill.

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Hemp is the source of cannabidiol, CBD, which is being added to many products and whose sales are climbing rapidly, spurring growth and hiring. Hemp-related jobs could be included in the next coding system update in 2022.

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"We count all those jobs, but we just don't break them out in the data yet," said Egan Reich, a U.S. Department of Labor spokesman.

Positions that exist in the cannabis industry are varied. In addition to direct jobs in legal or medical marijuana, such as "bud tenders" or "trimmers" who earn $12-$16 an hour, the industry has generated new ones in compliance and management that can bring six-figure incomes. Some of the jobs don't even involve touching the plant.

Naomi Granger, 38, worked as an accountant in a windowless Las Vegas office filing Securities and Exchange Commission documentation for a corporate accounting firm. When she lost her job, she started Dope CFO, an online accounting course that provides specialized support for bookkeepers, enrolled agents and certified CPAs in the cannabis industry.

Cannabis companies face special challenges that their bookkeepers need to know, Granger said. They're required to pay federal income tax, but unlike in other businesses, they're not permitted to write off business expenses, she said. Some cultivators need help with the accounting to assign "cost of goods sold."

"How can you determine exactly how much it costs to raise one plant in a greenhouse?" Granger asked rhetorically. Since January 2018, about 300 independent accountants have become members to use Dope CFO's programs and seminars, Granger said.

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"I feel like cannabis is opening up a whole new economy," she said.

Oregon and Colorado have been the best at officially tracking the number of jobs created by the marijuana industry. Washington, which legalized recreational marijuana five years ago, last calculated the number of pot-related state jobs in 2017.

The Oregon Employment Department tracks 33 business types it considers ancillary to legalized cannabis. In the first quarter of 2018, 669 reporting firms employed 5,038 employees who received some $37 million in wages.

Leafly believes those totals were low because 31,539 people had an active cannabis license to work in the industry. Oregon's estimated annual average cannabis wage was $29.62, the department reported, which was $2.67 higher than average state "real hourly wage" of $26.95 per hour.

In Colorado, the Department of Revenue keeps track of the 2,917 licensed marijuana businesses and 41,076 people licensed to work in the industry. Leafly estimated there were 31,486 direct industry jobs, as well as 4,723 indirect jobs and 7,872 ancillary, or "induced," jobs in the state.

Denver restaurants complained last year they were scrambling for workers who can make double the wages in marijuana jobs, a study showed.

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In Florida, the number of medical marijuana cards for which eligible patients applied soared to more than 175,000 as the state rolled out the program in 2018. Industry leaders expect that number to grow to 250,000 this year.

Economists used the state's data collected for registered marijuana dispensaries and the amount of sales per patient, as well as tax revenue, to reverse-engineer the number of industry jobs in the state, Barcott said.

The Florida minimum wage is $8.46 per hour, but median wages for "other-category" retail jobs in Florida -- where marijuana jobs are lumped -- rose to $15.99 per hour in 2018.

The five top job-creating U.S. states for cannabis in the Leafly report:

  • Washington state had 33,591 cannabis-related jobs in January 2019, growing 36 percent from 26,556 in 2018.
  • Colorado's marijuana jobs grew by 17 percent to a 2019 level of 31,486, up by 4,595 from 2018.
  • Florida's medical cannabis jobs jumped 703 percent from 1,290 in January 2018 to 10,358 a year later.
  • Nevada's medical and recreational cannabis jobs more than doubled during 2018 with the state adding 7,573 new jobs to total 11,766 jobs in January 2019.
  • Arizona added 5,120 new medical cannabis jobs in 2018, totaling 11,370 jobs by January 2019.
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This week, Illinois became the 11th U.S. state to legalize recreational marijuana. Gov. J.B. Pritzker welcomed the new law that goes into effect Jan. 1 with hope that the cannabis industry will bring jobs and tax revenue to the state.

In Illinois, growth in medical cannabis employment more than doubled to 3,020 direct cannabis jobs in 2019 compared with a year earlier, Leafly's study reported. Recreational cannabis is expected to create a job boom as the state issues licenses for almost 200 new adult-use dispensaries by the end of 2021, as well as additional craft-grown dispensaries and other ancillary businesses.

As the industry matures, states may become more uniform in reporting their data, so jobs can be tracked more transparently, economist Whitney said. Canada, which legalized recreational marijuana, also participates in the North American jobs category system, so it might blaze the trail for tracking jobs in the cannabis economy.

In 2019, Oregon asked the Bureau of Labor Statistics to create fields in its Quarterly Census of Employment and Wages software to track eligible jobs in the marijuana industry, including manufacturing, farming and selling, the Department of Labor's Reich confirmed.

"We definitely know where those jobs are, but we just haven't got a standard way to categorize them," he said.

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