Thursday, October 23, 2014

Legal marijuana created thousands of jobs in Colorado

Marijuana evaluations in California. Kevin Balluff / Moment via Getty Images

Marijuana dispensaries characterize it as a bit of a gold rush: the sudden swarm of thousands of people from in and out of Colorado trying to get into the state's new recreational marijuana industry.

"Everybody's expanding right now," Elan Nelson, business consultant for Medicine Man, one of the largest marijuana shops in Denver. "Really, we're just trying to keep up with demand."

Since retail sales of recreational marijuana began in January, the state has seen a small boom in jobs. The Marijuana Industry Group (MIG) estimates there are currently about 10,000 people directly involved with marijuana, with 1,000 to 2,000 joining in the past few months and more expected as high demand for recreational marijuana continues. MIG says it's hard to separate how many of those 10,000 jobs are tied to recreational marijuana and which are exclusively on the medical side, but at least a few thousand jobs came during and after the preparation and start of recreational sales.

In total, the industry makes up only about 0.4 percent of all employment in a state with more than 2.6 million jobs. But these are thousands of people who could otherwise find themselves on the unemployment line. And for Colorado, they're revenue-generating jobs that might not have existed at all if the state didn't allow recreational or medical pot.

The estimate also doesn't include other groups indirectly involved in the industry, including construction workers, accountants, plumbers, electricians, and attorneys. And it leaves out restaurants and other businesses who might benefit from out-of-state visitors going into Colorado to try out legal marijuana.

The marijuana industry doesn't expect its growth to slow any time soon. And there's good reason for that: at least during the first three months of retail sales, marijuana revenue grew from $14 million a month to $19 million a month.

Retail_marijuana_sales_in_2014

At the same time, Colorado's economy is showing other positive signs of growth — both a good sign for marijuana businesses and an indication that pot isn't scaring away others, despite previous warnings from business leaders. The state's estimated unemployment rate in April was 6 percent, down from 6.2 percent in March and 6.9 percent the year before.

"I don't think we're all of that, but I think we're playing a role," says Mike Elliott, executive director of the MIG.

Businesses are hiring, and there's a lot of interest in joining the rush

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Joe Raedle / Getty Images News

Medicine Man, like many in the industry right now, is hiring. The business has 48 employees today, but it wants to increase that number to 70 within a month.

It's a good thing, then, that there seems to be a lot of interest in joining in the industry, based on various businesses' experiences.

"We get a lot of people from out-of-state who are interested in moving to Colorado to work and be a part of this industry," Nelson says.

Nelson has been surprised by the quality of the applicants. She says she's seen plenty of people with undergraduate and graduate degrees apply, which shows even the most highly qualified candidates are looking to enter the marijuana business.

Employing these applicants is a matter of keeping up with demand. Prior to recreational sales, Medicine Man's customer base — made up of medical marijuana users — was about 100 a day. That number, with a boost from recreational users, has tripled to at least 300 today.

Anthony Butler, manager at Starbuds in Denver, shares similar experiences. Starbuds has tripled to quadrupled its business since it transitioned to recreational sales, and, by Butler's estimate, at least one or two people try to apply at his location — one of four stores his employer operates statewide — every day.

The stores also report a high influx of customers from outside of Colorado. Based on stores' ID checks (you must be 21 or older to buy pot in Colorado), roughly 50 to 70 percent of the stores' customers are from outside the state. That's one sign Colorado is truly creating pot tourism, as some advocates promised prior to legalization.

The industry is growing, and some expect growth to continue

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Joe Amon / Denver Post

Medicine Man today occupies about half of a 40,000 square-foot building. But as it's seen more demand from recreational sales, the business has developed plans to double its size: it now intends to expand to the remaining 20,000 square-foot warehouse in the same building. That will increase the business's sales and growth operations, which are both housed at the location.

But the growth isn't even limited to Colorado. Nelson says Medicine Man is now looking to opportunities in other states with recreational or medical marijuana, where her business could either set up entirely new shops or act as a consultant to upcoming entrepreneurs.

"We're looking to partner up with people in other locations and seeing where to do business and where we can find the best business partnerships," Nelson says.

Starbuds is more modest in its expectations. The chain just opened up its fourth store in the state, but it expects demand to remain stable at this point. "We have our regular customer base pretty much established for now," Butler says.

Part of that, however, is because demand is driving more people to get into the industry and, as a result, create more competition for existing stores like Starbuds. And that competition will likely increase in the future as more cities, such as Fort Collins, open up recreational sales.

But given that it's a new, burgeoning business, there's a lot of reason for entrepreneurs to be excited. Nelson, for one, doesn't expect her business to slow down anytime soon.

"It's going great," she says. "And if you see any sign of it slowing down, you let me know. Because I've never seen it."

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