“I’ll be the greatest president for jobs that God ever created”, Donald Trump decreed during a campaign event at the Polish American Congress in Chicago. “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families” trumpeted our new president from the Capitol in his inauguration speech.
For Trump, these are not just slogans. He has repeatedly stated and tweeted that his economic policies will add 25 million new jobs in the next decade. Creating this number of jobs would be a record for any administration. It would be the most jobs created by any president since the 1990s when nearly 23 million jobs were created during the boom years of the Clinton administration. One has to wonder if this is one of Trump’s “alternative facts.” Most mainstream economists view the likelihood of Trump creating anywhere near 25 million new jobs as highly improbable.
Trump’s presidential campaign played to, and took full advantage of Americans economic anxieties. In pre-election polls, many Americans indicated that although they thought they were better off than during the worst years of the Great Recession they certainly did not feel “fully recovered.”
A key to Trump’s surprising victory was the voter turnout in the Rust Belt states. Michigan, Pennsylvania and Wisconsin swung from blue to red during election. Trump tweeted, “Rusted out factories are scattered like tombstones across the landscape of our nation.” It is wishful thinking to believe that more than a very few of these lost manufacturing jobs will ever return to the United States.
There is a general acknowledgment that the U.S. economy is now close to full employment. Janet Yellen, the chairman of the U.S. Federal Reserve Board, confirmed this when she recently indicated that the U.S. economy is “close” regarding the Fed’s employment and inflation goals. Since the U.S. is at full employment, one has to wonder who will fill Trump’s promised 25 million jobs, especially with his agenda to tighten immigration.
Trump, who during the presidential campaign, swiftly dismissed Labor Department job numbers and unemployment rates as “one of the greatest hoaxes” and as “phony” was quick to react positively to the January employment numbers. True to form and always anxious to be seen as omniscient, he took credit by stating, “So we’re happy about that. I think it’s going to continue to be big league.”
Bullying Carrier Corporation to maintain a manufacturing facility in Indiana gave Trump the momentum to force Ford to cancel plans to build a $1.65 billion plant in Mexico. Ford instead, announced an investment of $700 million into an existing Michigan plant.
Trump took a victory lap for the reversal of decisions by Carrier and Ford. While he might also succeed in establishing punitive tariffs on imports, it is doubtful that either will ensure that very many manufacturing jobs will return to the United States. If some jobs do return, the number will certainly be nowhere close to the 25 million jobs he has promised.
Low-Hanging Fruit for Job Growth - America’s Legal Cannabis Industry
If Trump is serious about adding new jobs, he should look no further than America’s fast-growing legal cannabis industry. With a stroke of his pen on one or more executive actions, Trump could easily add millions of good-paying jobs.
America’s legal cannabis industry is on fire. From 2013 to 2014 the U.S. market for legal cannabis grew 74 percent, from $1.3 billion to $2.7 billion of annual revenues.
According to Arcview Market Research, legal cannabis sales in North America grew by 30 percent last year to $6.7 billion. A growth rate of 30% is remarkable, especially for an industry in an early stage of development. Arcview also projected that North American legal cannabis sales would exceed $20 billion by 2021, a compound annual growth rate of 25 percent.
To put this in perspective, the growth rate of the cannabis industry is larger and faster than the rate of growth during the dot-com era, when America’s gross domestic product (GDP) grew at what was then considered to be an astounding 22 percent annual rate.
The fast growing legal industry could expand at an even more rapid pace if Trump or Congress acted. Cannabis remains an illegal substance under federal law in the United States. This hampers the ability of state-licensed cannabis businesses to optimize their growth rate. It also limits the ability for American growers to export cannabis and results in a challenge in conducting cannabis medical research in the United States.
As the U.S. Sits on the Sidelines, Canada and Soon Israel Will Dominate the Export Market for Cannabis
The establishment of an innovative American cannabis export industry could easily add hundreds of thousands of new good-paying jobs to the U.S. economy. Obviously, there is no possibility of this occurring unless the president or congress decide to change the status of cannabis from its current classification as a Schedule I substance under the Controlled Substances Act.
U.S. cannabis producers are forced to sit on the sidelines and watch as Canadian cannabis cultivators go global. Canada’s cultivators are the first legal exporters of cannabis, and will likely soon be joined by the Israelis.
The Canadian licensed producer, Tilray, recently signed an agreement to export cannabis to Alef Biotechnology SpA, a company licensed by the Chilean government to import cannabis.
Another Canadian licensed producer, Canopy Growth Corp. (TSE: WEED) founded a Brazilian subsidiary with a local partner to import cannabis from Canada. Canopy Growth’s subsidiary, Tweed Inc., is also exporting cannabis to Germany through a local partner, MedCan GmfBH Pharma and Nutraceuticals.
Canada’s Peace Naturals has shipped cannabis to Pedanios GMBH, a Berlin distributor to 200 pharmacies in Germany, and Canada-based Aphria Inc. (CVE: APH) announced an agreement in November to export cannabis to MedLab Clinical in Australia.
An Israeli government committee, not content to sit idly by, gave a preliminary go-ahead for the export of medical cannabis a few days ago, on February 5th. While it could take months for the legislation to work its way through Israel’s parliament, it’s likely that the country’s cannabis cultivators could become formidable export competitors to the Canadians.
If Israel’s parliament approves the export of cannabis, Israel’s Ministry of Finance projects that the country’s cannabis cultivators are looking at a potential $250 to $300 million annual export market.
Job Growth in the State-Licensed Cannabis Industry
In many American states the legal cannabis industry is growing exponentially, adding tens of thousands of workers. As cannabis gains a wider acceptance by the American public, state-licensed cannabis businesses will continue to expand and increase the number of new hires.
The challenges the state-licensed cannabis industry faces, from tax policy to the difficulty or inability to access the banking system could easily be alleviated by action of the Trump administration or Congress. With policy changes, hundreds of thousands of new jobs could be created in state-licensed cannabis businesses.
Recent estimates indicate that legal, cannabis-related companies employ approximately 150,000 part-time and full-time workers nationally, with an estimated 30,000 of those in just one state, Colorado.
Moneywatch compared the 150,000 employees of state-licensed cannabis businesses to the number of flight attendants, which totaled 108,0000, librarians which totaled 131,000 and web developers, which totaled 127,000.
Voters in California, Maine, Massachusetts, and Nevada approved recreational, adult-use cannabis in November. As recreational cannabis businesses are established in these new adult-use states, hundreds of thousands of new jobs will be added.
As an example, California’s population is more than seven times that of Colorado. California’s new recreational, adult-use cannabis industry could, within a few years easily employ 300,000 workers. If the Trump administration or Congress take action, the number of employees in America’s cannabis industry could easily reach 1 million.
The fast-growth and opportunities in state-licensed cannabis industry have led to an increase in the number of Americans looking at the cannabis industry as a career choice. Whether they worked in the black market, or are looking at the industry as an alternative to working in America’s fast food industry, at a Starbucks, or as a farm worker in the wine industry, tens of thousands of Americans are being attracted to this emerging industry.
Forbes recently reported that at a Terra Tech job fair in Las Vegas, the company’s CEO, Derek Peterson, expected 200 job applicants. 2000 showed up instead. Peterson was quoted as stating, “Most people just want to get into the space....they believe in the product.” He indicated that while many applicants in the 40 to 50 age group had been aged out of the traditional workforce, many in that age group were looking for a new career in America’s fast-growing cannabis industry. Peterson stated that most of the applicants were not high school dropouts, but instead had at least a bachelor’s degree.
There are numerous job opportunities in the cannabis industry. Wages in America’s state-licensed cannabis businesses vary considerably between states and even within states.
The jobs that touch-the-plant, include growing and processing. Cultivators with outdoor grow facilities rely mainly on seasonal workers, not unlike other agricultural businesses. The number of employees will fluctuate as the cycle of planting or harvesting wax and wane.
The grow master, the individual responsible for cultivating cannabis, is often compared to a master chef in a restaurant. Grow masters tend to be in high demand, and in many states it's a seller’s market. In many cases grow masters can earn over $100,000 annually, but there is often a high employee turnover rate.
Bud trimmers take the freshly harvested cannabis plant and cut the flower from the stem, a tedious job, but more attractive to many than being a barista at Starbucks or working the counter at a McDonald’s. The Seattle Times recently stated that bud trimmers were being paid between $12 and $15 per hour. Contrast this hourly rate with that of Starbucks employees, who according to Glassdoor.com, earn an average of $9.43 an hour.
The Seattle Times also stated that gardeners and extract artists were earning between $50,000 and $90,000 annually, certainly a living wage that fits into Trump’s criteria for “good paying jobs.”
Extracts and concentrates provide the opportunity for higher-margin and proprietary products. In many somewhat mature cannabis states, with Colorado at the top of the list, estimates suggest that extracts and concentrates, or products derived from them, including vape pen cartridges, tinctures, capsules, and edibles are generating close to 40 percent of retail sales. While the number of jobs for “extract artists” are increasing at a fast-rate, increasingly many extract artists are finding themselves displaced by new employees with advanced college degrees including process engineering.
In states that allow edible cannabis products, there is an increasing demand for workers with experience and skills in food production including the manufacture of baked products and candies.
The large and growing number of dispensaries and retail stores also need employees, including both budtenders and store managers. Managers of dispensaries and retail stores are similar to managers of any other type of retail store, but they must have the skills and desire to work in a highly-regulated industry. Forbes estimates that a good cannabis dispensary or store manager could earn $75,000 annually.
When one thinks about cannabis jobs, what typically first comes to mind are jobs related to the growing, processing or retail sales of the plant or its derivatives, what are referred to as businesses that “touch-the-plant.” But, also jobs in “pick and shovel” businesses that service and support state-licensed businesses are growing at a very fast-rate.
These “pick and shovel” industries including firms providing payroll, accounting, and legal services to companies; providing the industry with software solutions, consulting services, security, packaging, and branding and marketing services.
Mark Stefanos, of the Los Angeles Times, in an opinion piece published on February 3, 2017, said and I concur:
“The policy benefits of legalization are many, and Trump shouldn’t wait to capitalize on the political opportunity. Legalization would be a deal that allows the government to save on the cost of enforcing prohibition and fighting a failing drug war. Pot would become safer as it becomes controlled and regulated, and the government could do a better job at youth drug prevention. Taxation from legal pot sales will provide state and local governments a healthy revenue stream, at the expense of our trade competitors. Most importantly, it would shore up support for his presidency from the demographics he needs, while growing the economy and jobs.”
As President Trump declared, “Buy American and hire American.
Copyright 2017 - Jeffrey Friedland
Tel. 1 646 450 8909