Researchers at San Diego State University and Bentley University analyzed employment and wage trends in states that have legalized cannabis and compared them to states that have not yet adopted cannabis reforms. The study's authors state that their work is "the first to examine the impact of recreational drug legalization on labor market outcomes for people of working age."
In their study, the authors found no evidence for cannabis-ban advocates' arguments that legalization creates health and safety problems, hinders job performance, and reduces job opportunities. No significant negative impact on the economy and labor force was found during the study.
“Instead, our results provide evidence that the legalization of recreational cannabis is associated with a modest increase in adult employment in the agricultural sector, which correlates with the opening of a new legal market for cannabis production and cultivation,” the working paper states.
The study also found that the legalization of recreational cannabis was associated with a small and often short-term increase in employment for Hispanics over the age of 30.
The researchers also explored why legalizing recreational cannabis use could be more economically beneficial than medical drug laws. For example, by increasing access to a given product to a wider audience, “there may be increased demand for labor and new economic opportunities.”
But recreational legalization is also more often carried out with elements of criminal justice reform, such as decriminalizing the mere use of cannabis. Thus, "by reducing the likelihood of having a criminal record, legalization has an important impact on the employment and earnings opportunities of those young people who are prone to arrest for possession of mj." According to the researchers, it can be expected that the legalization of recreational cannabis could have a greater impact on those "disproportionately affected by marijuana prohibition: young blacks and Hispanics."
Finally, since recreational legalization expands the market for marijuana to a much wider range of potential consumers than does medical legalization, the expansion of marijuana production and cultivation may be much more significant. Thus, there is more room for growth in employment in agriculture and retail trade (perhaps along with the wages of workers).
The introduction to the study contrasts different points of view on the legalization of cannabis, citing statements by billionaire Elon Musk and actor Seth Rogen. In 2018, the former said he doesn't smoke cannabis regularly because he thinks it's "not good for productivity." The second, on the other hand, said in 2011 that he smokes "a lot of weed when working."
However, the study did not attempt to find out whether cannabis consumption actually improves worker productivity. Rather, it looks at broader economic trends following the implementation of legalization policies. According to the authors, legalization could have a positive impact on employment and wages: "The introduction of a new legal industry, which could include marijuana cultivation and production, as well as the legal sale of marijuana in recreational dispensaries, could increase employment," the study says.
Moreover, if legal access to mj leads to the withdrawal of substances that have a negative impact on performance, including opioids or alcohol abuse, labor market outcomes may improve (or at least not worsen), the authors of the study say: “Furthermore, if marijuana is effective in relieving physical ailments, relieving stress, or improving psychological health, that improved health could lead to positive labor market spillovers.”
The findings are broadly consistent with past analyses, including the 2021 analysis, which found that legalization is associated with increased productivity and reduced work-related injuries.