Study Finds Legal Cannabis Shop Boosts Employment Rates
A published study based on eight years of data demonstrates how the legalization of adult-use cannabis in Colorado decreased unemployment and did not negatively impact worker productivity
Studies

Legal Weed Shops Lowers Unemployment Rates in Colorado, Study Says

A published study based on eight years of data demonstrates how the legalization of adult-use cannabis in Colorado decreased unemployment and did not negatively impact worker productivity
Studies

Legal Weed Shops Lowers Unemployment Rates in Colorado, Study Says

Author Rogelio Alvarez
PUBLISHED
Dec 13, 2021
read time 2 MIN
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A published study based on eight years of data demonstrates how the legalization of adult-use cannabis in Colorado decreased unemployment and did not negatively impact worker productivity, as first reported by Marijuana Movement. 

“In terms of jobs, it is clearly the counties with the recreational dispensaries that benefited most after Colorado legalized adult-use cannabis,” Avinandan Chakraborty, the study’s co-author, said.

The study is titled “The Effects of Recreational Cannabis Access on Labor Markets: Evidence from Colorado” published in the IZA Journal of Labor Economics.

Three researchers working on the study found a 4.5% increase in employee numbers, with the strongest effects found in the manufacturing sector. Data before dispensaries opened was compared with data after the cannabis retail stores opened. 

The research was based on Colorado’s county-level data from 2011 to 2018. Researchers looked at the start dates of dispensary sales and changes in unemployment rates in 64 counties. 

Analysts also studied Wages and employment dates by industry subsector and overall. According to the study, the researchers did not find any evidence of increased labor force participation and wages.

They determined that the new employment is drawn from self-employed and unemployed workers instead of pulling employees from other industries. 

“Overall, the findings in this paper provide evidence that recreational cannabis dispensaries improved county-level labor market conditions in Colorado,” the study says.

The year 2021 saw an increase in the number of cannabis studies published. Still, none of those studies truly focused on the effects of recreational cannabis legalization on labor market outcomes like this study did.

As states like New Mexico and New Jersey launch their recreational markets, the authors pondered what the research can mean for states that want to get into selling any cannabis supplies in the near future.

“Our results suggest that, by preventing counties from banning dispensaries, New Mexico’s approach to legalizing cannabis will yield more widespread employment benefits than those experienced in Colorado,” Sarah Stith of the University of New Mexico and co-author of the study said.

Colorado was one of the first states to legalize adult-use marijuana, with some counties’ first recreational cannabis dispensaries launched in 2014. Counties in Colorado have the choice of banning dispensaries from operating within their borders. 

Colorado’s Department of Revenue will implement new restrictions on cannabis sales for people starting 2022. People will still be able to purchase cannabis in child-resistant containers to enjoy with friends. 

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Avinandan chakraborty
Colorado
County-level data
Employment
Iza journal of labor economics
Labor force participation
Legalization
Research study
Sarah stith
Tech & studies
The effects of recreational cannabis access on labor markets: evidence from colorado
Unemployment rates
University of new mexico
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