US researchers have found the opening of legal recreational cannabis dispensaries boosts jobs, particularly in manufacturing, with no evidence of a decline in productivity.
Published in the IZA Journal of Labor Economics, “The effects of recreational cannabis access on labor markets: evidence from Colorado” found unemployment fell, and employment increased, in counties where dispensaries opened compared to those where they did not.
Co-author Avinandan Chakraborty said: “In terms of jobs, it is clearly the counties with recreational dispensaries that benefited most after Colorado legalised adult-use cannabis.”
Recreational cannabis dispensaries began opening in Colorado in 2014, but were operating in only 58% of counties by the end of 2018, with bans in places such as El Paso County, home to Colorado Springs.
The study authors compared counties before and after dispensaries opened with those with no dispensaries and found dispensary entry triggered a decrease in the unemployment rate, driven by a 4.5% increase in employment rather than any reduction in the labour force.
With no increase in wages or labour force participation, the new jobs appear to be drawing staff from unemployed and self-employed workers rather than pulling them away from other industries.
The lack of a negative effect on wages or on labour force participation suggests negative effects on workers from legal access to cannabis, such as decreased job performance or reduced efforts to find work, are limited.
Co-author Sarah Stith said: “Our results suggest that, by preventing counties from banning dispensaries, New Mexico’s approach to legalising cannabis will yield more widespread employment benefits than those experienced in Colorado.
“In fact, we may already have begun experiencing some of the benefits as producers begin preparing for dispensaries to open in April 2022.”
A bill to legalise recreational use in New Mexico was signed by Governor Michelle Lujan Grisham in April 2021, with the first licensed sales expected by April next year.