Legalizing and regulating cannabis has many economic and societal benefits as bringing cannabis out of the illegal market creates jobs, generates revenue and decreases harmful arrests, prosecutions, and jailings. It isn’t all happy unicorns and rainbows for the burgeoning industry however as overregulation and over taxation still hinder hard-working entrepreneurs’ ability to fully unleash the potential of the market, especially the federal 280e tax code that prevents the deduction of normal business expenses. The dastardly 280e tax code hits retailers the hardest, especially small businesses, so please support craft cannabis boutiques like Kind Leaf as much as you can.
Cannabis commerce has been implemented in several ways and it is difficult to get all of the details correct, especially while cannabis remains illegal under federal law. Some states have limited licenses while others, namely Oregon, initially set up system with relatively low barriers to entry, to bring in as many people into the regulated market as possible.
Opening up the cannabis industry to as many licensees as possible has been great for consumers, bringing prices down, but the competition has made making profits difficult. Oregon regulators eventually started limiting cultivating licenses, but with so many actors already in the market, the Beaver State still has low cannabis prices.
While Oregon certainly hasn’t gotten everything right, I think that it is safe to say that the state has done a better job than California. Oregon’s Southern Neighbor, unfortunately has been too slow to issue licenses and taxes definitely too damn high. As Jefferson Public Radio reports, the two states’ different methods have led to job markets going in the opposite direction as the Oregon cannabis industry continues to grow while California’s cannabis jobs actually decreased:
Although recreational marijuana has been legal in Oregon for about six years, the industry continues to see job growth. Meanwhile, California’s marijuana job numbers decreased in 2019.
That’s according to a new report by Leafly, a Seattle-based cannabis publication and phone app, which recorded a 20 percent increase in marijuana industry jobs in Oregon last year.
Leafly uses state data and market sizes to estimate the number of full-time equivalent jobs in the legal marijuana industry — including farmers, trimmers, and botanists, as well as administrative staff. It doesn’t include workers who primarily work with hemp or CBD products.
Oregon, with 18,200 industry jobs, experienced a 20% increase while California, with 39,800 jobs, suffered 8,000 job losses. Leafly’s report pointed to local California regulations, especially with 2/3 of localities banning retail businesses as the culprit. Also, compared to Oregon’s maximum 20% tax rate, California’s cannabis taxes, which can range between 45% to 80% depending on your product and locality, is just too damn high.