In five short years from 2016 to 2021, Oregon’s new recreational cannabis industry went from zero to approaching 10,000 employees, though many workers transitioned from the existing medical marijuana market.
Employment has since retreated as demand failed to absorb a glut of supply and producers that in turn, reduced output. The latest figure for the second quarter of 2022 estimated total industry employment at 7,671, a 17% decline from peak employment of 9,175 a year earlier.
It’s no coincidence that 2022 was the first year that Oregon’s recreational cannabis market saw a drop in sales volume. In fact, every county where it was legal had a decline in sales, with Multnomah County losing the most.
In a recent Oregon Employment Department report, Guy Tauer, regional economist for four southwestern counties explained that, in the absence of federal data, the agency created a database of recreational marijuana-related employers including, “businesses involved in the growing, processing, and distribution of marijuana and marijuana products, and businesses that support those activities.”
Notably, the figures were a conservative estimate as they don’t capture sole proprietors and any workers not covered by unemployment insurance.
Tauer added that well before state legalization, “this industry has a long-standing presence and is even more concentrated in the outdoor marijuana cultivation-friendly climate of the southwestern corner of the state, essentially for generations. The economy has been rife with cannabis activity, economic output, and income gains, mostly beneath the scope of any real data to measure that activity.”
Price is another factor being measured these days. According to the Oregon Liquor and Cannabis Commission, the wholesale price of usable marijuana fell from a peak of over $1,800 in 2017 to a new low of $550 per pound in December 2022 after rebounding during the pandemic to nearly $1,500 in the fall of 2020. Median retail prices fell from over $10 in late 2016 to a new low of $4.08 per gram last December.
In last year’s second quarter, the biggest chunk of state cannabis employment, 58%, was in trade, transportation and warehousing, mostly made up of retail dispensary workers. Agriculture came next with 29%, followed by manufacturing at 8%. Professional/business services and other services each had 3% of the workforce.
Average annual wages per employee was highest in professional/business services at $54,217, following by manufacturing at $47,110 and $44,811 in agriculture, well above the $32,852 in trade, transportation and warehousing.
Last year also witnessed the state’s first marijuana harvest decline since legalization, with total wet weight produced falling 13% to 9.6 million pounds.
Regional economist Tauer noted that the Oregon Office of Economic Analysis had lowered the recreational marijuana tax revenue forecast, “due to the pending recession, downgraded economic outlook, and ongoing price declines which impact tax collections even if the underlying volume of sales and consumption remain more steady.” However, the forecast was brighter longer-term as the state population grows and incomes rise.
H/T: www.bizjournals.com
