Job boom in the (legal) marijuana industry

Saturday , November 08, 2014 - 1:51 PM

By Danielle Trubow
Bloomberg News

WASHINGTON — Bruce Nassau made his first fortune in the cable television industry in Colorado. Now he sees opportunity in the legalization of marijuana.

He and his partners have four shops with about 75 employees that serve recreational and medicinal users, with a fifth for retail only opening last week. He expects to have about 90 workers total by January.

Nassau, 61, is also consulting and partnering with entrepreneurs hoping to get into the medicinal industry in Illinois and Nevada, where he sees “enormous upside opportunity.”

Voters in Alaska, Oregon and the District of Columbia on Nov. 4 approved legalization of pot for recreational use, following Colorado and Washington state in 2012. Legal recreational sales began in both states this year. Medical marijuana, which Florida failed to approve that day, is allowed in 23 states and also is creating legitimate business ventures and jobs amid the patchwork of regulations.

In one of those states, Illinois, about 200 people at an Oct. 30 career fair in Chicago signed up to learn more about the medical marijuana industry. The booth was organized by Todd Mitchem, 43, an almost five-year veteran of Colorado’s industry, where medicinal use has been legal since 2000. Two job fairs in Denver held this year drew more than 3,000 people for about 650 positions, Mitchem said.

Opportunities range from entry-level budtenders — akin to bartenders — to trimmers, growers and managers. Accountants, lawyers and marketing executives also are being attracted to the forefront of a movement that “will wind up being legal throughout the U.S.,” Nassau said. “It’s an entirely new industry. It’s incredible — and there are many, many jobs.”

Just how many is being debated, although data is starting to be collected in Colorado. Businesses involved in the growth, production, and sale of marijuana for medicinal or recreational use employed 3,523 Colorado residents in the first three months of this year, up 14.2 percent since the end of 2013, according to data compiled by the Colorado Department of Labor and Employment.

In the first nine months since recreational use has been legal in Colorado, more than 12,000 residents have received occupational licenses, according to the state Department of Revenue. That allows them to be directly employed in the industry.

“We’re in the first nine months of a 10-year process,” said Nicholas Colas, chief market strategist of ConvergEx Group in New York. “It’s like the old sporting analysis that we’re not even in the first inning. We’re in the parking lot.”

ConvergEx surveyed 10 stores mostly in Denver and Boulder in June and October and found business has been steady, with some 100 to 300 customers a day who spent $50 to $100 per transaction. The consistent monthly demand is creating “good and stable jobs,” Colas said.

The marijuana industry pulled Chad Drew, 38, away from a corporate sales position. The Arizona State University graduate had worked for four years in the medicinal marijuana industry in Colorado when he left in 2012 to pursue a career in radio advertising sales more related to his communications degree.

He realized a year later that the new position “wasn’t at all what I wanted it to be.” Drew passed the background check, paid the $150 occupational license fee and got hired in January at Evergreen Apothecary as a budtender, selling marijuana and educating customers for $10 an hour.

He’s now an assistant manager earning about $14 an hour and said he’s thankful for stable wages rather than commissions. Friends often ask him how to get into the industry, he said, and the answer depends a lot on when shops are expanding.

The numbers don’t satisfy Harvard University economist Jeffrey Miron, who has advocated legalization for more than a decade. Miron, also director of economic studies at Washington- based Cato Institute, published a working paper on Oct. 23 about the effects of marijuana policy in Colorado.

In what is the first part of a longer-term study, he analyzed gross domestic product and personal income in the state and said there is no empirical evidence that medical marijuana stimulated the economy or created jobs.

The legalized industry workforce reflects people coming from other positions or from the illegal marijuana industry, Miron said. “There was never any credible case that we’d see meaningful changes in employment.”

The industry is offering opportunities particularly to younger workers, said John Hudak, a fellow in governance studies at the Brookings Institution in Washington, who published a report on Colorado’s legalization process in July. “That can be a real economic positive in a state trying to find jobs for young people and for an industry that doesn’t require a college degree to do a job or extensive training except for higher agriculture.”

John Heffelman, 29, was drawn to Colorado in March to “start a new life” in the marijuana industry. He’d worked varied shifts in the kitchen at a New York restaurant earning $13 an hour after five years. He landed a trimming job in Denver in April for $10 an hour at Medicine Man, a family-owned dispensary slated to be the subject of a TV reality show.

In six months, he’s been promoted to assistant lead trimmer and earns about $14 an hour. He works days in what he calls “a zero-stress environment,” trimming plants alongside colleagues who are also friends and helping the state track the 60,000 grams of marijuana that pass daily through his hands.

For Nancy Kole, 22, a budtending job in Boulder has provided a means to pay the bills. She had struggled to find work at architectural firms since earning a degree from the University of Colorado in May because companies had downsized or wanted employees with five or six years of experience, she said.

Her position at The Farm has turned “out to be the jackpot,” Kole said. She’s not giving up on her longer-term career goals, “just temporarily switching over to a different industry.”

Wages in entry-level jobs typically pay $10 an hour, compared with Colorado’s $8 hourly minimum wage, increasing for more advanced positions. The average weekly wage was about $555 in the first quarter, according to state data, not accounting for how many hours worked.

Josh Cusack and others say landing jobs is as much as about getting in on the industry ground floor as the pay. Cusack, 41, was unemployed in 2010 when he got hired at a medical marijuana dispensary at $10 an hour.

He’s now a sales manager at Evergreen Apothecary earning almost $20 an hour. Though he says he’d be making more money in his former for-profit education field, helping medical users has given him the opportunity to do something he’s “passionate about.”

A medical user himself due to severe arthritis, “disability is a real part of my future and I’m just enjoying this for as long as I can while my body will let me do it,” he said. “You can’t put a price on going to and leaving work with a smile on your face.”

While second-quarter numbers won’t be available until the end of the month, the Colorado Department of Labor projects employment will continue to grow at a higher-than-average pace.

What began as an initiative to help sick people is maturing into a business-minded, revenue-seeking industry attracting entrepreneurs and professionals, said Dan Riffle, an attorney and former policy director of the Marijuana Policy Project. “It’s a very diverse, interesting mix of suits and tie-die shirts,” he said.

Even as companies contemplate creating national brands, marijuana remains illegal under federal law and the varied state and municipal regulations make expansion challenging. The Justice Department said last year that it wouldn’t challenge state legalization, provided authorities prevent out-of-state distribution, access for minors and drugged driving, among other regulations.

Nassau, the former cable industry executive, said he was attracted to the marijuana industry four years ago because he saw the same “consumer potential out there as there was for cable.” He sold a nationwide contracting firm to ViaSource Communications Inc. for $18.2 million in 1999.

While he initially had wanted to be an investor, he gradually found himself taking on the role of chief executive officer among his five partners, which include his twin brother. In addition to speaking with politicians in Colorado and consulting with entrepreneurs in other states, he says he gets “a kick out of mentoring” younger partners and watching them develop their business acumen.

“There’s nothing like it,” he said. “How many chances do you get to be part of creating an entirely new industry?”

Sign up for e-mail news updates.

Recommended for You

Activate Your Membership
Sign Up for the Standard Examiner Newsletter
×