The effects of recreational cannabis access on labor markets: evidence from Colorado

Abstract Recreational cannabis markets possibly increase labor demand through investments in facilities for growing, processing, and retail sales of cannabis, as well other industries such manufacturing, leisure, hospitality. However, this may vary substantially across counties within a state most states with legal recreational allow individual to ban commercial sales. Meanwhile, supply change positive negative effects from use. Using county-level Colorado data 2011 2018 exploiting variation the existence timing start dispensary sales, we test changes unemployment rate, employment, wages, overall by industry subsector. Consistent an demand, estimate that sale dispensaries is associated 0.7 percentage point decrease rate no effect on size force. We also find 4.5% number employees, strongest found manufacturing. wages. Given lack reduction force participation or are likely limited, line existing literature. The unemployment, coupled indicates dominate supply. Our results suggest policymakers considering access should anticipate possible employment.