Legal Cannabis Industry Loses Jobs For First Time

Oversaturated markets and dwindling funding are putting a damper on the cannabis industry’s job market.

As of early 2023, there were 417,493 jobs supported by the legal cannabis industry, a 2% drop from a year ago, according to the 2023 Vangst Jobs Report. It’s the first time in the history of legal cannabis that the industry lost jobs.

“With interest rates going up, people are less interested in making risky investments when you can make safe investments and get a standard 6% return,” said Karson Humiston, CEO of the Denver-based cannabis industry jobs platform Vangst. “Cannabis is a longer-term risky bet. People are not interested in putting their money into something where they may not see a return for a decade.”

The decline in jobs comes even as cannabis sales are on the rise. Cannabis sales increased by $850 million last year — a 3% rise from $25.25 billion in 2021 to $26.1 billion in 2022 — but companies still felt the pinch of inflation and were forced to cut jobs.

“The volume of sales was up year over year, but revenue was down because they were selling the product for less,” Humiston said.

Strong Emerging Markets

Although the industry lost jobs nationwide, emerging markets like Michigan, New Jersey, Illinois, Missouri, Montana and New Mexico saw double-digit revenue growth and job creation.

Missouri, for example, started adult-use cannabis sales in February. The state added 6,958 cannabis-related jobs last year for a 350% gain over the previous year, bringing the total number of jobs as of February to 9,733.

But more mature markets like Colorado, Oregon and California suffered big job losses as they watched sales decline. In Colorado, sales dropped from $2.2 billion in 2022 to $1.8 billion last year. And with that, the Centennial State lost 10,481 jobs — a 28% decline. Colorado’s cannabis industry employs 27,856 people.

But Humiston doesn’t think the decline is a sign of things to come. She expects hiring will pick back up this year as wholesale cannabis prices find solid footing and established companies grow at a steady, single-digit rate.

“2022 was a reset year for the industry,” Humiston said. “The industry will continue to grow. It will be one of the largest consumer-branded products in the U.S. and that will mean jobs. I’m still optimistic long term, but it’s been a rough road.”

Read next: Whiskey Is Barreling Towards Spectacular Gains. Here's How To Invest