Early cannabis jobs numbers don't tell full story

May 7, 2018

 

The Department of Labor tracks employment and tax information on the cannabis industry, but the many small businesses that make up that industry also make it difficult to know exactly how many people are working in it.

Despite a vote to legalize and regulate commercial cannabis sales in 2014, economists are only now beginning to put together a picture a the new industry, which is still barely a blip on the radar compared to the state’s other big industries.

 


More people are being added to payrolls in cannabis stores across the state every month. By the end of 2017, more than 500 people were working in the industry, earning $8.5 million. But that’s just a brief snapshot, and it doesn’t account for everything. Those numbers come from the state department of labor, where Karinne Wiebold is an economist.

“The data that’s available is only about one year old and it’s changing very rapidly. We’re seeing a large increase every month in the number of employees that are working for licensed marijuana businesses, as well as the wages and the taxes.”

Most of those wages and taxes are coming from Anchorage and Fairbanks. But the Kenai Peninsula has as high a concentration of businesses as those areas, it’s just that not everything shows up in the unemployment insurance numbers that Wiebold uses to report on the industry.

“And not all of the marijuana businesses are covered by unemployment insurance. What I mean by that is if you have an owner/operator, they don’t have to pay into the unemployment insurance system, so they aren’t going to be captured by our data. So a lot of very small businesses might not be showing up in our data yet because it might just be a couple people who own the business who are operating it.”

And even though other states are seeing huge growth in their own cannabis industries, Weibold says there’s not a lot of data to predict where Alaska’s could go relative to those places because those industries have developed and grown up in different ways, like Colorado.

“Where they had medicinal marijuana with a sales component before recreational marijuana was legalized. So when you look at the way that industry changes, it’s going to be a little different than what we see in Alaska because there was already a growth and sales mechanism in place when they transitioned into recreational marijuana. That’s something that we also saw in California. Alaska is really unique and we can’t really compare ourselves to the other states as far as our initial rates of growth.”

Which, she says, makes studying the burgeoning industry all the more interesting.

“Seeing all of this stuff coming into fruition has been really fascinating. And what’s going to be really neat, now that we have this first initial snapshot of what this first year basically looks like, is to see what it looks like in the second year and the third year and the fourth year and see what the rate of change looks like and how the industry matures. We’re going to get a better idea of how big this can become and what kind of an impact it might have on the state. But it’s changing and it’s growing. It’s still going to be a small piece, probably for quite a long time, but it’s a piece that’s evolving and it’s going to be really neat to get to watch that in the next couple of years.”

Wiebold writes about Alaska’s cannabis industry in the May issue of Alaska Economic Trends from the department of labor.