Local employment in pot-connected businesses spike; other sectors see modest growth

While private and public sector jobs in Humboldt County have seen modest increases in the past decade, California Employment Development Department’s North Coast Labor Market Consultant Randy Weaver said Wednesday that ancillary businesses to the cannabis industry have seen substantial growth.

Between 2004 and 2013, employment in fertilizer manufacturing increased by 118 percent; lawn and garden equipment and supply store employment grew by 136 percent, and farm supply and merchant wholesaler employment increased by 145 percent, according to Weaver.

“In terms of physical people, it’s not always a ton of people. Fertilizer employment went from 39 to 85 people,” Weaver said. “But it’s not the count we’re looking at, it’s the growth rate. That’s a pretty phenomenal increase.”

But the industries that saw the highest employment growth in the county between May 2007 and May 2017 were private education and health care in first at about 1,700 jobs, agriculture and farming at 900 jobs, government jobs with another 800 jobs and leisure and hospitality at about 700.

Government job growth overall increased by 2 percent — from 27 to 29 percent of total employment — during the past decade, which Weaver said is “not an astronomical amount.”

Weaver said a boost in agriculture jobs automatically brings up the question of whether this includes the regulated cannabis industry, but Weaver said that industry is still in a fledgling state and that the real impact won’t be known for some time.

“I honestly kind of expected a tidal wave and I didn’t really see that,” Weaver said. “It’s coming in more at a trickle.”

The largest growth in businesses connected to the cannabis industry occurred in businesses that supply farms, according to Weaver. As part of a study looking at competitive advantages in certain markets, Weaver said they researched how the concentration of these ancillary farm supply businesses changed in a region consisting of Del Norte, Humboldt, Mendocino, Siskiyou and Trinity counties between 2004 and 2014.

In 2004, concentration of fertilizer companies in the region was seven times larger than the state as a whole and grew to 17 times higher by 2014, Weaver said.

“If you think about that, California is a really big agricultural state,” Weaver said.

During that same decade, North Coast lawn and garden suppliers grew from being three times more concentrated than the state to being eight times more concentrated. The North Coast’s concentration of farm supplies and merchant wholesalers was twice as high as the state in 2004 and doubled by 2014, Weaver said.

As to what is driving this demand for these agricultural products, Weaver said the more “mainstream” forms of agriculture like dairy farming actually decreased slightly — by about one-fifth percent — since the recession.

“The obvious answer is that it’s the cannabis industry,” Weaver said. “It is driving growth and I think we’re going to see more of that.”

But Weaver said that growth in the cannabis industry might be in new white collar jobs rather than the traditional farming, trimming and dispensary jobs. Competition in other counties could also affect local job growth in the cannabis industry, Weaver said.

“We’re seeing growth in a lot of people looking for more white collar jobs such as being a brand ambassador or in marketing and sales,” Weaver said. “If your business gets big enough, you may get IT people.”

Net employment growth in Humboldt County between May 2007 and May 2017 — the latest month of employment data available — increased by about 500 jobs, going from 50,800 to about 51,300, Weaver said. Weaver said that an increase in the durable goods industry, such as manufacturing and construction, would be good for the county as it would allow for funds to flow in from outside the county. However, he said local manufacturing jobs have been in decline for several decades.

“We certainly could be in worse shape,” Weaver said about the overall job market. “Workers are in demand, there is no question about it. That’s not so good for the employer because they have to compete harder for their employees. If this goes on long enough, this could result in a push to increase the wages some. Employers, in order to compete, may have to offer more money to get the employees they want.”

Will Houston can be reached at 707-441-0504.