Blunt Truths About Cannabis Economics

Candi Clouse, PhD

November 18, 2025 14:22

INTRODUCTION

Modeling the economic impacts of marijuana in all parts of the supply and value chain presents unique challenges because of its fragmented legal status. While cannabis is legal for medical or recreational use in many states, it remains federally prohibited, creating gaps and inconsistencies in official data. Some related products such as CBD, delta variants, THC derivatives, and THC-infused beverages, are federally legal under certain conditions, further complicating the picture. As a result, marijuana appears in some datasets but is entirely absent from others, requiring analysts to blend state-level reporting, private industry estimates, and proxy measures to build a comprehensive economic model.

IN THE DATA

There are four places where the marijuana industry shows up in the U.S. IMPLAN data, but only in states where it is legal and reported to the state, and therefore the federal government.

Marijuana, grown under cover - Industry 6 - Greenhouse, nursery, and floriculture production
Marijuana, Medical Manufacturing - Industry 163 - Medicinal and botanical manufacturing
Marijuana merchant wholesalers - Industry 383 - Wholesale - Other nondurable goods merchant wholesalers
Marijuana stores, medical or recreational - Industry 395 - Retail - Miscellaneous store retailers

These industries all contain legal economic activity related to marijuana, but are not solely marijuana industries. For example, Industry 6 contains alfalfa, Christmas trees, eggplant, ginseng, mushrooms, and more.

Also remember that in states where it is not legal, ahem North Carolina we are looking at you, there will be no activity in the data related to marijuana. However, you will find related industries like those involving CBD, delta variants, and THC infused drinks and products in their respective industries as these are currently legal.

NOT IN THE DATA

The Current Employment Statistics (CEW) dataset does not include proprietors; therefore, any cannabis-related operations organized as sole proprietorships or partnerships will exclude proprietors from CEW employment counts.

The U.S. Department of Agriculture (USDA) tracks industrial hemp (Cannabis sativa containing no more than 0.3% THC) under the Domestic Hemp Production Program, established by the 2018 Farm Bill. Data on hemp acreage, yield, production, and value are published annually in the National Hemp Report by the National Agricultural Statistics Service (NASS). In contrast, marijuana (cannabis with THC content exceeding 0.3%) remains classified as a Schedule I controlled substance under federal law; therefore, USDA does not collect or publish data on marijuana cultivation, production, or market value. Industry reports, such as Leafly’s Cannabis Harvest Report, identify this omission as a significant gap, noting that marijuana ranks among the most valuable crops in states where it is legal, yet remains absent from USDA datasets, and therefore from IMPLAN.

HASHING OUT THE IMPACTS

To model new or existing operations related to Mary Jane, there are six industries of interest.

Marijuana, grown under cover - Industry 6 - Greenhouse, nursery, and floriculture production
Marijuana, grown in an open field - Industry 10 - All other crop farming
Marijuana, Medical Manufacturing - Industry 163 - Medicinal and botanical manufacturing
Marijuana merchant wholesalers - Industry 383 - Wholesale - Other nondurable goods merchant wholesalers
Marijuana stores, medical or recreational - Industry 395 - Retail - Miscellaneous store retailers

CANADIAN CANNABIS CULTURE

While legislation is confusing at best in the U.S., the Canadians legalized it in 2018 for medical and recreational use. Therefore, the Canadian data has four specific industries related to marijuana.

Industry 3 - Cannabis production (licensed)
Industry 4 - Cannabis production (unlicensed)
Industry 139 - Cannabis stores (licensed)
Industry 140 - Cannabis stores (unlicensed)

HEMP UNDER FIRE

U.S. legislation in late 2025 to reopen the government contained language closing the “hemp loophole” in the 2018 Farm Bill extension that allowed for hemp-derived products containing THC to be sold. It imposes an extremely low cap of 0.4 milligrams of total THC per container on finished consumer goods. It also bans cannabinoids synthesized or manufactured outside the plant, effectively eliminating semi-synthetic products derived from CBD. These provisions, scheduled to take effect after a one-year implementation period, could render more than 90% of current hemp-derived products noncompliant, disrupting a $28 billion industry and threatening hundreds of thousands of jobs. While proponents argue the changes address public health concerns and regulatory gaps, critics warn they amount to a de facto prohibition that will devastate farmers, manufacturers, and retailers nationwide. Sounds like a great issue for someone to tackle using IMPLAN!

Adding Brand New Industries

Adding an Industry that Doesn’t Exist Yet by Customizing a Region

Data Sources for Select Industries: Farm, Construction, Rail Transportation, and Government