An Unforeseen Side Effect of Marijuana Legalization: Homelessness

By New Frontier Analysts

Much has been made of the new jobs and tax revenue legal marijuana has generated in states to legalize the drug, along with the tourists and investors that have flocked to take part in the legalization experiment. Legal cannabis seems to be an economic boon for these states from the outside. But little attention is paid to one potential drawback of the “green rush,”an apparent increase in homelessness.

The consensus among homeless shelters in Colorado is that 20-30% of newcomers are migrants to the state, attracted by the prospect of employment in the legal marijuana industry. And while the legal marijuana industry has generated many jobs, it hasn’t been enough to keep up with demand, leaving many shut out from the industry.

Additionally, employment in the marijuana industry carries the extra burdens of state-mandated application fees and criminal background checks, which make it extremely difficult to obtain employment, especially for low-income migrants to the state. All these factors have compounded to make homelessness and economic estrangement a very real byproduct of the burgeoning legal marijuana industry.

It’s also the case that, while private consumption of cannabis is legal, it is still illegal to consume cannabis in public. This means that the homeless, who don’t have a private residence in which to consume marijuana, are more likely to incur the penalty of $100, which isn’t insignificant for someone already on the streets. This is why the head of criminal justice services for Larimer county believes the number of homeless individuals in his jail went from 674 in 2012 to 1,018 in 2015.

It still remains unclear, however, if this effect on the homeless population is exclusive to Colorado, given its greater media presence–and thus greater appeal to economic migrants–than many of the other states with growing marijuana industries. Cities with thriving marijuana industries like Portland and San Francisco have yet to see a similar effect on their homeless populations.

A final factor to consider is the depletion of the black market for marijuana in these states as the price of legal marijuana continues to plunge. This leaves those who dealt in the black market without steady income–and for those with a criminal record, no viable career options within the industry.

New Frontier Analysts

Our data scientists drill deep with rigorous analytics to provide insight into key trends and market opportunities. We track the state of cannabis and its regulation in all major legal markets.