Ensuring the high road in cannabis: Understanding the risk and opportunity in a newly legalized industry
Key takeaways:
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Legal cannabis is a rapidly growing industry employing hundreds of thousands of workers. State legalization continues – most recently Connecticut.
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Proposed federal legalization legislation has rightly prioritized channeling public investment and developing entrepreneurial opportunities to communities harmed by the war on drugs, which are overwhelmingly communities of color. This is essential, but insufficient. Thus far, little, if anything, has been said around job quality in the industry.
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This is a once-in-a-generation opportunity to shape working conditions in an industry from its inception. Lawmakers have a chance to ensure cannabis becomes a model industry of good-paying, safe, family- and community-sustaining jobs. But it will take active policy interventions or cannabis will likely look like many other low-wage, low-job-quality industries.
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Unionization offers the simplest way to ensure high job quality in the industry. Labor Peace Agreements (LPAs) have been shown to be an effective policy tool for enhancing job quality in the cannabis industry.
A rapidly growing industry
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In 2020, the cannabis industry grossed between $17.5 and $20.3 billion.
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The industry currently provides 240,000–321,000 full-time equivalent jobs. (More than the number of firefighters in the United States.)
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Rapid growth is expected as stigma diminishes and more states create legal markets.
Assessing how the industry will mature: two already visible paths (low-road vs. high-road)
| Cannabis segment | Cultivation | Processing | Distribution / Sales |
| Proxy industry/ies: | Commercial agriculture: crop production, animal food, grain, and oilseed milling, agriculture and forestry support | Various food, beverage, pharmaceutical, medicine, tobacco manufacturing | Retail sales – pharmacies, groceries, cosmetics; alcohol, groceries, food, tobacco wholesaling; warehousing and storage |
Cultivation
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Job quality in commercial agriculture is among the poorest in the economy.
- Typical hourly wages range from $11.71 – $14.62. (Average nonsupervisory wage outside of agriculture is $24.67.)
- Widespread use of problematic H-2A visas and farm labor contractors (farm worker “temps”)
- Most are exempt from overtime in the FLSA and organizing rights under NLRA
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Vertical integration in cannabis means some cultivation workers have access to unionization.
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Current union contracts for cultivation workers show typical cannabis cultivation workers would earn on average $7,030 more in annual wages in the high-road vs. low-road scenario.
Starting wages in cannabis jobs are consistent with union-negotiated wage floors: Typical starting hourly wages in cannabis jobs, by industry segment
| Occupation | Industry segment | Wages – Vangst | Wages – Indeed.com | Wages – Union contracts |
|---|---|---|---|---|
| Grower/horticulturalist/cultivation technician | Cultivation | $16.00–$22.00 | $15.50–$20.00 | $15.00–$21.00 |
| Trimmer/harvester/post-harvester | Cultivation | $14.50–$16.00 | $14.00–$19.00 | $15.00–$17.00 |
| Extraction technician/lab technician | Processing | $16.80–$19.50 | $21.30 | $23.00–$25.00 |
| Production/processing/manufacturing technician | Processing | $15.00–$18.75 | $15.00–$23.00 | |
| Edibles specialist | Processing | $17.00–$24.00 | ||
| Packager | Processing | $14.50–$18.50 | $16.75 | $16.00–$18.00 |
| Merchandiser/inventory control/warehouse technician | Processing | $15.00–$21.00 | ||
| Budtender/patient care representative/pharmacy technician | Sales | $14.50–$17.00 | $15.75 | $15.00–$21.00 |
| Customer service representative | Sales | $16.40–$22.00 | $18.90 | |
| Delivery driver | Sales | $15.00–$18.00 | $17.00–$21.50 | |
| Shop host/security | Sales | $16.00–$22.00 |
Notes: Indeed.com updates wage data regularly based on job listings posted on its site, so values change regularly. The values listed reflect the approximate range observed in August 2021.
Sources: Vangst 2020; Indeed.com 2021; collective bargaining agreements for cannabis unions in California, the District of Columbia, Minnesota, New Jersey, New York, Pennsylvania, and Washington provided by the United Food and Commercial Workers (for agreements that contain starting wage information for 2020 or later).
Processing
- Not all existing manufacturing jobs are “good” jobs. Durable goods manufacturing tends to have higher pay and good benefits, in large part due to the historically strong rates of unionization in that segment of the industry.
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In an unregulated industry, outsourcing to staffing firms will contribute to lower pay and poorer job quality.
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In a high-road scenario, processing workers could earn on average $8,690 more in annual wages than in a low-road scenario.
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Unionization in jobs similar to cannabis manufacturing jobs provide large wage premiums to Black and Latinx workers.
Unionization for processing workers helps promote middle-class earnings: Hourly and annual union difference for cannabis processing proxy workers by selected characteristics (2019$)
| Union hourly wage difference | Average full-time annual wages of nonunion workers | Full-time annual wage difference | Implied average full-time annual wages with a union | |
|---|---|---|---|---|
| All | $4.18 | $32,790 | $8,686 | $41,476 |
| Occupation† | ||||
| Packers and packagers | $3.33 | $26,185 | $6,937 | $33,121 |
| Agricultural and food science technicians | $6.07 | $47,693 | $12,634 | $60,327 |
| Gender | ||||
| Women | $3.46 | $30,290 | $7,190 | $37,480 |
| Race/ethnicity | ||||
| Black | $3.34 | $31,746 | $6,951 | $38,697 |
| Latinx | $4.81 | $28,598 | $10,005 | $38,603 |
Source: EPI analysis of Current Population Survey ORG data (EPI 2021a).
Retail sales
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Traditional retail jobs are characterized by low pay, few benefits, and unpredictable scheduling.
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Union-based training and certification programs can help develop knowledgeable staff and improve compliance with dispensary safety regulations.
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Unionized cannabis retail workers could earn $2,800 in annual wages than non-union workers.
Retail and low-wage workers are less likely to have employer-provided benefits: Share of workers with access to employer-provided benefits, by benefit type and selected worker group
| Group | All private-sector workers | Retail occupations | Private-sector workers in the lowest 25% of wage earners |
|---|---|---|---|
| Paid vacations | 79% | 73% | 55% |
| Paid holidays | 79% | 77% | 56% |
| Health insurance | 69% | 55% | 36% |
| Retirement | 67% | 72% | 43% |
| Paid sick leave | 73% | 64% | 47% |
| Life insurance | 56% | 42% | 24% |
| Short-term disability | 42% | 35% | 18% |
Source: National Compensation Survey from the Bureau of Labor Statistics (BLS 2019).
Unionization leads to substantial earnings gains for women, Black, and Latinx retail workers: Hourly and annual union premium for proxy cannabis retail workers by selected characteristics (2019$)
| Hourly union difference | Average full-time annual wages without union | Full-time annual union difference | Implied average full-time annual wages with union | |
|---|---|---|---|---|
| All | $1.35 | $26,127 | $2,806 | $28,933 |
| Occupation† | ||||
| Packers and packagers | $1.15 | $22,261 | $2,390 | $24,652 |
| Health technologists | $1.72 | $33,273 | $3,573 | $36,846 |
| Gender | ||||
| Women | $1.25 | $25,487 | $2,607 | $28,094 |
| Race/ethnicity | ||||
| Black | $1.11 | $24,569 | $2,319 | $26,888 |
| Latinx | $2.11 | $25,297 | $4,389 | $29,686 |
Notes: The union premium is how much more unionized workers earn in wages than similar nonunion workers in cannabis retail proxy jobs. Unionized workers are those workers covered by a union contract. The union premium is calculated using regression specification no. 3 from Table 6. For full methodology, see the Appendix. The full-time premium is estimated assuming workers work 40 hours per week and 52 weeks per year.
† Packers and packagers is the occupation with the lowest median wage in the retail proxy group. Health technologists is the occupation with the highest median wage in the retail proxy group. For a full list of occupations in the retail proxy group, see Appendix Table 3.
Source: EPI analysis of Current Population Survey ORG microdata (EPI 2021a).