EUGENE — Although it's too early to say where employment level in Oregon's marijuana industry will settle out, we do have some early indications.
The most basic way that the Oregon Employment Department tracks employment and wages is through the Unemployment Insurance program, which collects data from employers subject to UI law to produce our Quarterly Census of Employment and Wages. Each firm is assigned to an industry based on its primary activity. Industry definitions are set by the U.S. Department of Labor, which has made recommendations for the industries that marijuana-related firms are categorized in.
There are currently eight industries that include some portion of activities related to marijuana cultivation, production, processing, wholesaling, and retailing. The industries include many types of establishments, not just those growing, selling, or otherwise working with marijuana. In the future, there may be separate industry codes for marijuana-related firms as there are for other commodities. But, for the time being, marijuana employment and wage breakouts based on current industry classifications alone are not possible.
Indicators of employment
In other industries where some of the employment is not subject to UI laws such as commercial fishing and real estate, we can use licensing or other records as an indicator of the level of employment.
As of Oct. 1, 2015, sales were allowed to recreational users to purchase marijuana from approved medical dispensaries. Supply for these dispensaries is the excess from medical patients and care givers.
Records of approved dispensaries are kept with the Oregon Liquor Control Commission, which did a survey to provide insight into current business practices. The survey was conducted between February and March of 2015. At the time, there were 230 certified dispensaries in Oregon. At the time of writing this article, there were 413 registered dispensaries, 326 of which are certified for retail recreational sales.
The survey found that the average dispensary employed six workers, with an average of 186 weekly hours worked per dispensary. The average wage per employee was $11.96 per hour and 9.6 percent of employees were covered by employer health insurance. Although there is an error range to any survey data, this survey suggested about 2,478 full- and part-time employees in dispensaries at the time of the survey.
Many dispensaries are vertically integrated, meaning they may act as a warehouse, processor, a wholesaler and a retailer all at the same location. So, many occupations are represented in the employment and wage estimates.
The wage rate from the survey is influenced by several occupations working in the same establishment. In addition, anecdotally, we know that some workers, especially processors, are paid at least partially with product, which may lower money wage rates.
Currently, medical dispensaries are the only retail establishments that can sell recreational marijuana. Medical dispensaries will be able to sell small amounts until Dec. 31. Afterward, a dispensary will have to be either a certified medical dispensary or a licensed recreational retail store.
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More complete data will be available as the OLCC begins issuing licenses for recreational marijuana. As of January 1, the OLCC began accepting applications for licenses for labs, processors, producers, retailers and wholesalers. A separate license is needed for each activity and a nonrefundable application fee applies.
The definition of activities that may not be self-explanatory follows:
- A lab license is for a laboratory to test marijuana for things like adulteration (pesticides, mold, etc.) and potency.
- A processor is a business that will transform the raw marijuana into another product or extract. Processors are also responsible for packaging and labeling.
- A producer is a grower.
The table lists the total applications for each activity as of 8 a.m. March 4, 2016. At this point, the producer license is the most sought after followed by the retail, processor and wholesale licenses. License applications for labs are relatively small at four.
OLCC also separates license applications by county. The top counties at the writing of this article were Multnomah (113), Lane (79), Clackamas (75), Jackson (74) and Washington (71).
OLCC plans to start issuing licenses to outdoor growers first, possibly by sometime in April 2016.
Although the current dispensary system survey from OLCC and the first two months of license applications do not say much about where total employment in marijuana businesses will settle out in the future, they are an early indicator of the current magnitude. Indications are that employment at marijuana businesses will initially employ a few thousand workers, but not up into the tens of thousands.
As regulations and market forces take effect the magnitude of employment may change. As other states loosen marijuana laws, there may be less demand from neighboring states. There may be certain strains grown in Oregon that are popular beyond the state, increasing demand for growers, processors, and wholesalers. We don't know if the number of retail outlets will need to be more or less to meet consumer demand.
The 35,962 caregivers under the OMMP are another consideration. They are currently allowed to grow up to six plants for medical patients. How this translates into employment in the future as large, licensed commercial producers enter the market is unknown.
For now, there is still a long way to go before we see the full effects of marijuana legalization on employment.
Brian Rooney is the Oregon Employment Department's regional economist for Douglas and Lane counties.