Editor's Note: A previous version of this article said MedMen CEO Adam Bierman's salary was $1.5 million, but that was his salary in 2018. His current salary is $50,000.
A lot of the talk on the markets these days is about a possible recession. Falling interest rates have raised concerns about how much longer the U.S. economy can keep going at its current pace. A big trade war with China doesn't help things, either.
However, one industry that could have a significant positive impact on the economy may not get the chance to help. I'm talking about the cannabis industry.
Job growth could be significant
According to New Frontier Data, there are about 340,000 jobs in the U.S. legal pot market today. That's an increase of more than 30% from last year. The company projects that by 2025, that number will more than double to 743,000.
While that's impressive growth in just six years, the real potential will only be realized if cannabis is legalized federally. Under that scenario, the current number of jobs could rise to 1.63 million in 2025. Even in 2019, New Frontier believes there could have been 1.5 million cannabis-related jobs in the country, more than four times the current number.
That's a staggering amount of growth that could immediately provide people with jobs in an emerging industry and generate significant tax dollars. While many states have progressed toward legalizing cannabis, it could still take years for full legalization. Even allowing cannabis companies access to the banking system has been a big challenge.
These are well-paying jobs
Cannabis jobs can suit many skillsets for workers who might not have options in their industry of choice. Running a dispensary, providing security, making edibles, and even trimming buds provide jobs in the new industry.
Many of the jobs pay well, too. According to data from Fortune, a dispensary manager can earn more than $68,000 per year, an $11,000 boost over what food service managers can expect to make. Budtenders average about $32,000 a year. That's nearly $6,000 more than what a bartender typically earns. Even a bud trimmer can earn nearly $30,000 a year.
There is, however, more disparity when it comes to the CEO level, where CEO Adam Bierman of MedMen Enterprises (OTC:MMNFF) earned $1.5 million in 2018, far and away more than his peers in the industry. (His current salary is $50,000.) CEO Terry Booth of Aurora Cannabis (NASDAQ:ACB) earns $380,000, while former Canopy Growth (NASDAQ:CGC) CEO Bruce Linton was earning $228,000 as of last year's data. Given MedMen's excessive spending and cash burn, it may not come as a big surprise that the company is a leader in executive pay.
Why this is important for investors
The job potential in the industry is a great argument for pushing marijuana legislation through. It has wide-ranging benefits for not only workers but also in generating income for the government. Besides more sales taxes being generated by the industry, higher wages also produce more income tax.
While there may still be questions and concerns about the long-term impact that cannabis may have on users, there are plenty of advantages that could help convince lawmakers to legalize pot in some form.
And that could be great news for a company like Curaleaf Holdings (OTC:CURLF), which runs 49 dispensaries in 12 states. One of the challenges for Curaleaf and other marijuana stocks is that acquisition is often the easiest way to grow and expand in the cannabis industry. But acquisitions can be costly. Federally legalizing pot would make it a lot easier since Curaleaf could simply ship its products across state lines and not need operations in every state in which it plans to sell marijuana. But even having more states legalizing pot could open more doors for Curaleaf, and that could allow it to become a bigger force in the industry.
Federal legalization is still the long-term goal for the industry. The better Curaleaf and other cannabis companies perform and are able to generate jobs, the stronger the argument for legalizing marijuana on a large scale. In the end, that would be a big win for not only cannabis companies and their investors but workers and governments as well.