Cannabis Industry Jobs and Banking Challenges in 2023

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Recent reports on jobs and banking reveal the latest changes affecting the cannabis industry.

Released on April 10, the 2023 Vangst Cannabis Jobs Report – produced by Vangst, a cannabis industry jobs platform, and Whitney Economics, a cannabis and hemp business consulting, data, and economic research firm – found there are currently 417,493 full-time equivalent jobs supported by the legal cannabis industry in the US (1). This is reportedly a 2% drop in cannabis industry jobs for the first time since 2012 (1).

According to the press release, some notable key findings and predictions from the report include (1):

  • Nationwide, annual cannabis sales increased by $850 million in 2022, which is a 3% rise from $25.25 billion in 2021 to $26.1 billion in 2022. That figure includes all state-regulated medical and adult-use sales (not hemp, delta-8, CBD, or unregulated sales). Adult-use states accounted for 77% of total sales.
  • One of the newest markets within the industry saw exceptional growth while other legacy markets saw extreme drops. New Jersey gained 4,220 jobs in 2022, bringing the total number of cannabis jobs in the state to 7,367. On the other end of the spectrum, California lost 13% of cannabis employees last year bringing their total to 83,593.
  • Michigan moved ahead of Colorado to become America's second-largest cannabis employer, supporting 35,405 jobs.
  • 23% of cannabis jobs are in retail, 31% in cultivation, 17% in manufacturing, and 20% in ancillary and indirect jobs. The remainder are in wholesaling, distribution, and laboratory testing.
  • Whitney Economics expects to see nearly 12% growth in revenue, industrywide, by the end of 2023.

Recent global challenges are affecting banking in the cannabis industry as well. According to a Reuters article last month, bank collapses in the US and Europe could possibly affect already restricted cannabis banking opportunities (2). Analysts estimate that only 10% of US banks and 5% of credit unions offer banking services to cannabis companies, and smaller banks, regional lenders and credit unions, which usually extend credit to the sector, are seen as facing higher risk from the current turbulence. (2). “US cannabis borrowers could also see their already higher interest rates go up further due to the crisis,” the article stated (2).

"What this crisis means is probably the duration of the capital tightness in our space (will continue) because we're seeing risk-off mentality," said Morgan Paxhia, co-founder of cannabis hedge fund Poseidon Investment Management (2). "We're expecting banks to become more restrictive with lending and that's going to have implications." Further contributing to complications is the fact that the Secure and Fair Enforcement Banking Act (SAFE) has not been passed in the Senate (2).