Retail employment, decimated by pandemic lockdowns and consumers’ switch to all-things-delivered, contracted significantly this year. According to the Bureau of Labor Statistics, there are about half a million fewer people working in retail now than in February. But one area of retail employment is thriving – inside cannabis shops. Marijuana dispensaries and stores have generally been declared “essential services,” allowing them to remain open during state shut-downs, and sales have risen during the pandemic. That revenue growth is expected to continue.
Cannabis shops range from “mom and pop” small stores to multi-state chains. There’s Ruckus for example, which operates a tiny cannabis shop in the Capitol Hill neighborhood of Seattle and a sister nano-store in the aptly-named “stumbletown” section of Seattle’s Ballard neighborhood. On the other side of the spectrum Curaleaf, based in Massachusetts, owns 93 dispensaries in 23 states.
David Belsky, chief executive of FlowerHire a recruiting company in the industry, says he has noticed retail jobs blooming in the 12 states where his team operates. Michigan for example, legalized recreation cannabis use less than a year ago, and the state has gone from a small handful of shops open on December 1, 2019 to at least 200 retail outlets open now. There are also an additional 100 actively licensed retailers in Michigan that haven’t opened their stores yet he said.
Each cannabis shop hires 15-100 people based on its size Belsky estimates. “There’s very fast acceleration in retail – hundreds of thousands will be employed,” he said of the national trend.
Cannabis retail jobs are not gig work so they are eligible for health insurance and if necessary, unemployment benefits Belsky noted. The positions also “can’t leave the state” because cannabis has to be purchased in the state in which it is consumed. It is illegal to buy marijuana in one state and bring it to another, so stores in Massachusetts selling to consumers in that state for example, couldn’t move to New Hampshire.
Retail presence and staff recommendations are more important in cannabis than many other consumer product industries because there are so few advertising or marketing opportunities to gain customer awareness. “An efficient distribution model is critical for success,” said Peter Barsoom, founder of the cannabis edibles company 1906, His Colorado-based company recently partnered with Stash House in Oklahoma to get its cannabis-infused hard and chocolate candies products into more than 150 dispensaries in that state.
Hiring is also up because sales are up. Consumers are not traveling, dining out, going to concerts or the theatre, so “there is more disposable income available for cannabis purchases,” said Zach York, an inventory manager at Lightshade which runs dispensaries in Colorado.
Retail growth is also fueled by a “feel-good factor” that customers get spending at dispensaries these days, said Alana Malone chief executive of the cannabis extracts company Green Dot Labs. “The cannabis supply chain is inherently and entirely local at a moment when so many other local options—like farmers markets and the neighborhood cafe—have been shut down,” she said.
While the trend in the last year or two was for so-called “Multi-State Operators” to set up their agriculture and retail operations in as many states as possible, many companies now are finding that investing more deeply in just one state can be an easier route to success said Belsky. Re-creating organizations in different states, with each entity following that state’s particular set of rules, ownership requirements, etc. is a complex undertaking and splits investor capital in more directions he said. Opening up multiple stores in just one state keeps the back-office operations and infrastructure simpler.
Consumer demand in a state can grow quickly, even when it’s just medical cannabis that is allowed. In Oklahoma, where Barsoom is selling his edibles, medical marijuana has been legal for certain conditions since mid 2018. In May of 2020, total sales were $61.4 million, or about $217 per licensed patient according to MJ Biz Daily. Sales totaled $300 million during the first 5 months of 2020.