The Cannabis Industry Employs 150,000 Americans
It’s worth saying: Behind every one of these jobs is a hard-working, taxpaying American. They’re the botanists at Medicine Man in Denver; the oil extraction technicians at Dama in Seattle; the budtenders at Farma in Portland; the mechanical engineers at Apeks Supercritical in Johnstown, Ohio; the scientists at Steep Hill Labs in Portland. They’re lawyers at Harris Bricken, they’re software developers at MJ Freeway Business Solutions. They’re writers, editors, web developers, event planners, and customer support specialists here at Leafly.
This is a tough market to figure out because such a high volume of sales occur to tourists during cruise ship season. Growing booms in summer, too, with the whole midnight sun thing happening. Depending on the month you choose, you could extrapolate to an annual market as low at $27 million and as high as $51 million. We’ll stick to the low side and estimate Alaska as a $30 million market in 2017. That supports 542 FTE jobs.
Arizona has 136,515 medical marijuana patients. That’s a per-capita rate of 2%, one of the highest in the nation, and it yields an annual market worth $360.8 million, which supports 6,520 jobs.
Weeks after the application period for medical marijuana dispensary licenses, the state Department of Health had only received two completed forms. So we’re keeping our estimate of private-sector jobs at six (three for each application). Within state government, we figure there are probably about five full-time jobs supported by the need to create and carry out the licensing process. Even at mature build-out, the market here doesn’t figure to be robust. Arkansas has a population of 3 million. Qualifying conditions are strictly limited, and concern over the illegality of owning both a gun license and an MMJ card may keep a number of people from obtaining theirs. The buy-in for dispensaries is steep, too: a $15,000 application fee, and $100,000 for a license. With a tight capture rate of 0.09% (about that of New Jersey prior to its recent reforms), that would lead to an MMJ patient population of about 2,700. That’s a $7 million market, which would support about 129 jobs.
The legal medical market in California is notoriously difficult to quantify. Last year we settled on an estimate of $2.4 billion. We’re conservatively estimating 10% growth that encompasses the natural expansion of the MMJ market as well as ramped-up hiring by companies getting ready for the 2018 opening of the state’s adult-use market. A 10% bump puts the annual value of the California market at $2.64 billion, which supports 47,711 FTE jobs.
Colorado sales, reported by the state, seem to have reached a leveling point in the past five months, averaging about $126 million per month since March. That translates into an annual market of $1.488 billion in sales, which supports 26,891 FTE jobs. We consider that a conservative estimate, because Colorado hosts an unusually high number of ancillary businesses that serve legal markets around the country. In legal affairs—to take just one sector—firms like Vicente Sederberg and Hoban Law Group have expanded rapidly and opened satellite offices in more than a half-dozen legal states.
As of August 13, the state had 19,077 registered patients, nine dispensaries, and four producers. Based on the patient count, that’s a $50.4 million annual market, which supports 911 FTE jobs. That’s an increase of 44%, or 279 jobs, over our 2016 estimate.
Straight up: Delaware has terrible records on its medical marijuana program. The state counted 1,407 patients in FY 2016. That translates into $3.7 million in sales, which supports 67 full time jobs. That’s actually a decrease from the 81 jobs we estimated in 2016. How is that possible? It’s Delaware. They really don’t know what’s in their own data. We’re hoping for a better 2017 from Joe Biden’s old home.
Last year we noted about 3,500 medical marijuana patients registered with the District of Columbia Department of Health. As of August 1 of this year, that number had grown to 5,372. At $2,643 in purchases per patient annually, that makes up a market worth $14.2 million—not quite double what it was late last year. That supports about 257 full time jobs.
We’ve seen wild estimates of the state’s potential patient pool at upwards of 500,000. With a total population of 30 million, that would be a 2.5% capture rate—not impossible, but unrealistically high. In a report prepared for state officials last year, the Marijuana Policy Group estimated the patient pool at closer to 300,000. That would put the market at a value of $793 million, which would support more than 14,000 jobs. That’s at full maturity. As of July 27, though, there are only 26,968 registered patients. The growth is phenomenal; on June 7, there were 16,760 patients. At that rate, we could see up to 50,000 patients by the end of 2017. For now, we’ll base the market on 27,000 patients, call it $71.4 million, and estimate that it supports 1,290 full time jobs.
Hawaii recorded 18,004 patients as of July 31. That translates into an annual market of $47.6 million, which supports 860 jobs. The data from Hawaii is tricky. The state has a high per-capita patient rate—with a population of 1.4 million, 18,000 patients represent a 1.25% MMJ rate—and continues to grow at a rate of about 500 new patients per month. At the same time, the first of the state’s eight licensed dispensaries only just recently opened on Maui. We’re a little hesitant to go with the 860 figure; that one dispensary isn’t supporting all those jobs, obviously. But 18,000 patients have to get their medicine somewhere. At this point most of them are accessing it, legally or semi-legally, outside of the licensed dispensary system—and that supports local growers and caregivers. We’ll call it 860 with reservations, and we’ll hope that Hawaii has all eight dispensaries open by this time next year.
The Illinois Department of Public Health’s Medical Cannabis Division counts 27,100 patients as of August. That pencils out to about $71.6 million in annual sales. State records show that sales through the first seven months of 2017 came to $43.6 million, which puts annual sales at $74.8 million. We’ll go with that figure, which supports 1,352 jobs. That’s an increase of 466 jobs, or a growth rate of 49%, over the past year.
When it comes to Louisiana’s medical marijuana program, very little makes sense to us. Earlier this year, the Las Vegas-based cannabis company GB Sciences agreed to pay Louisiana State University $1.2 million per year for five years for permission to grow medical cannabis at a secure location on the LSU campus. Patients are expected to access the market in 2018. Using $1.2 million per year as a kind of “market,” we figure that supports at least 22 FTE jobs at LSU.
Homegrow is huge in Maine. How do we know? There are 51,324 registered medical marijuana patients in the state. That should translate into about $135 million in annual sales. Instead, the state only recorded $26.8 million in dispensary sales in 2016. Industry officials estimated an additional $27.3 million in caregiver sales in 2016. That’s a total market of $52.1 million, which supports 942 jobs.
Medical Maryland still hasn’t opened its dispensaries, but they say they’ll be serving patients by the end of 2017. In the meantime, there are actually quite a few people working in Maryland’s cannabis industry already, gearing up for opening day. And we have some unique data on those jobs. Because Maryland’s medical marijuana law contains diversity clauses, the state keeps statistical information on industry owners and employees. According to that data, there are currently 559 people working in the cannabis industry in Maryland.
As of July 31, the Massachusetts Department of Health and Human Services recorded 39,202 active registered patients. That translates into an existing medical market worth about $103.6 million, which supports 1,873 jobs. About 800 new patients join the registry every month. The opening of the adult-use market next year is expected to change all that, of course. With 6.8 million residents, Massachusetts has a population nearly the size of Washington’s—with another 4.5 million people in Connecticut and Rhode Island within driving distance. It wouldn’t be surprising to see annual sales approaching $1 billion by 2019.
In one of the nation’s most restrictive medical marijuana programs, Minnesota’s two licensed cannabis manufacturers have lost $11 million in the past two years. The reason? Not enough patients. That’s changing. According to quarterly data from the Minnesota Department of Health, the state recorded 6,184 patients on June 30. That’s nearly double the total from 2016. The annual market is around $16.3 million, enough to support 295 jobs.
Montana’s entire MMJ industry went through a painful shutdown last year; after a November ballot measure revived dispensaries, patients are finding medicine again. As of July, the state counted 17,819 patients, with 616 providers. That translates into a $47.1 million annual market, which supports 851 jobs. That’s a decrease from our late 2016 estimate, because of all the dispensary closures in 2016.
Nevada isn’t expected to release first-month adult use sales figures until later this fall, so we’ve had to do some back-of-the-envelope estimating here. There are 60 cannabis stores open in Nevada. The majority are in the Las Vegas area; nearly all the rest are in Reno/Sparks. Based on what we know from other adult-use states, we’ll estimate that the state’s top 10 stores will bring in $750,000 a month by the end of the year. The next 35 will realize $300,000 per month, with the bottom 15 bringing in about $90,000 a month. That adds up to annual sales of $232 million, which supports 4,193 jobs. We expect that number to continue to rise as a stop at a legal cannabis store becomes a part of the Vegas experience for many of the city’s 43 million annual visitors.
New Hampshire just opened its medical marijuana program up to patients with chronic pain and/or PTSD, which should expand the patient base considerably. In its 2016 annual report, the state’s Therapeutic Cannabis Program Registry counted 2,089 patients. That should support a market of around $5.5 million, which in turn supports 100 jobs.
New Jersey counted 10,799 active patients in 2016. That’s an annual market of $28.5 million, which supports 516 jobs.
As of July, the state had 45,441 active patients licensed, and 6,182 active personal production licensees. $15.2 million worth of medical marijuana products were purchased in the second quarter of 2017. That extrapolates into an annual market worth $60.8 million, which supports 1,102 full time jobs. That’s an increase of 52%, or 379 jobs, over our 2016 estimate.
The state of North Dakota has budgeted money for six full-time employees at the Department of Health. Until they roll out the regulations and grant licenses, there isn’t much else happening here.
Ohio’s market isn’t open yet, but plenty of people are already hard at work. In July, 185 companies applied for Ohio’s 24 available medical cannabis growing licenses. The state has also awarded substantial contracts for seed-to-sale tracking systems and licensing design. The medical market in Ohio could eventually be significant, as state law allows for a wide variety of qualifying conditions, including chronic pain. If 0.5% of the population carries a card, that’s a market of 55,000 patients, or around $150 million annually. For now, though, we’ll estimate that each of those applying companies required the work of at least one half-time partner. So 90 FTE jobs.
According to the Oregon Liquor and Cannabis Commission, sales for the past five months have averaged $43.32 million, with a rise of about $5 million in sales every month. We estimate that by the end of 2017, Oregon will be a $600 million annual market. That supports 10,843 jobs.
Pennsylvania granted 27 permits for MMJ dispensaries on June 29. Each is eligible to open a total of three locations. There are expected to be 52 open within the year (total). If you figure at least three full time owners/operators of those dispensaries, that’s about 90 jobs right now. The dispensaries may become operational on Jan. 1, 2018.
Vermont’s patient count is rising slowly, by about 29 new patients per week. The state doesn’t report its patient counts very often. Last November they had 3,487. By this June, they tallied 4,438. By Sept. 1, we expect the state to have 4,750 patients registered. That pencils out to an annual market of $12.5 million, which supports 227 jobs. That’s a 59% increase over 2016.
Sales for the past four months (March–June) averaged $122.4 million. We expect Washington to nearly hit $1.5 billion in sales in 2017, at $1.469 billion. That supports 26,556 jobs.
