Oregon’s Employment Transition to Recreational Marijuana Dispensaries

by Guy Tauer

November 6, 2018

Having grown up in the heart of the so-called “Emerald Triangle” of the once entirely illicit marijuana industry, I’ve observed remarkable changes both from a legal and societal acceptance perspective in a relatively short time span. I would imagine that those who lived through the end of the alcohol prohibition era in 1933 witnessed a similar rapid change once the speakeasy gave way to legal bars, taverns, and legal retail liquor sales.

One of those evolving changes in Oregon’s legal marijuana industry is the shift to retail dispensaries. As of January 1, 2017 sales are allowed at licensed recreational retailers. Previously, medical marijuana dispensaries were also allowed to sell to recreational customers – any adult over 21 years old. Currently, recreational dispensaries may sell cannabis to both recreational and medical customers, with only recreational customers subject to taxes. Now medical-only dispensaries are only allowed to sell cannabis to those with a medical marijuana card.

From a business perspective, these changes appear to be ushering out the era of medical-only dispensaries. There were only 48 strictly medical dispensaries left in the state in April 2017. By late October 2018, the Oregon Health Authority/Oregon Medical Marijuana Program database listed just 5 medical-only dispensary businesses remaining statewide. On the other hand, the Oregon Liquor Control Commission (OLCC), which oversees the recreational marijuana industry, lists 592 active licenses for retail dispensaries.

From an employment perspective, the Oregon Employment Department has to play a bit of catch-up with these rapid changes. The Oregon Employment Department tracks employment and wages through the Unemployment Insurance (UI) program, which collects data from employers subject to UI law to produce our Quarterly Census of Employment and Wages (QCEW).

In an effort to track payroll employment at marijuana-related businesses, the Oregon Employment Department has created a database of known marijuana-related recreational and medical dispensaries. They use a variety of methods to make this determination including reviewing information provided by the employer, referencing industry registries like the OLCC license registry, and reading information publicly available online. But it’s not yet a perfect science. Because of marijuana still being illegal in the eyes of the federal government, some establishments are not forthcoming in proclaiming that they are selling marijuana. Dispensaries might have workers who are not counted in that industry.  For example, if a dispensary uses a staffing agency to fill their job openings, those workers would be included in the professional and business services industry – where temporary help or employment placement businesses are counted. A sole proprietor with no employees covered by unemployment insurance would also be excluded from the Oregon Employment Department figures.

In an earlier attempt to count payroll employment at marijuana dispensaries, I tallied jobs in the “other services” industry – where medical dispensaries employment is counted. Then this series was continued when we moved recreational marijuana dispensary employment from other services to retail trade.  
To keep up with the changes in the medical/recreational distribution of firms in the marijuana industry, we’ve been recoding where recreational dispensaries are counted. Beginning in the first quarter of 2017 we shifted some establishments that were previously counted in the medical dispensary category “business, professional, labor, political, and similar organizations,” a subset of “other services,” to “all other miscellaneous store retailers,” which is in the retail trade sector. 
According to our most recent information, there were 298 recreational dispensary establishments in Oregon with 3,036 jobs that had an annual average pay of $26,224 in the second quarter of 2018. Recreational dispensary total payroll in that quarter was $19,904,031. The graph shows the recreational dispensary totals by county, as reported by the OLCC (recreational) and the count of medical and recreational establishments in our Quarterly Census of Employment and Wages database.

Conclusion

Calculating exact employment, payroll and establishment counts during this expansionary period for marijuana businesses is challenging. We are seeing rapid growth in the recreational marijuana industry and at the same time transition from medical to recreational sales. We will continue to refine and update our database of marijuana-related businesses as the industry grows and matures.

For more information: Oregon’s recreational marijuana industry, http://www.oregon.gov/olcc/marijuana/pages/default.aspx.

Oregon’s medical marijuana program: http://www.oregon.gov/oha/PH/DISEASESCONDITIONS/CHRONICDISEASE/MEDICALMARIJUANAPROGRAM/Pages/index.aspx.


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