And yet wages are rising.
The pandemic fundamentally changed the U.S. labor market. For example, Google search volumes for “remote work” are double prepandemic levels, and those for “ask for raise” are up 30%. Workers clearly have the bargaining power to demand flexible work and higher pay in the current environment. The next recession will determine how permanent these changes really are.
Let’s talk weed. Will the black market end when recreational cannabis becomes available in New York?
I doubt it. The black market in California is twice the size of the legal one. You already see unlicensed trucks and stores selling flower and edibles in Midtown. When it’s legal for stores to sell cannabis, it’s going to be tough to compel users to pay more, especially with inflation so high.
How can the state crack down?
It sent cease-and-desist letters and threatened charges, but police and prosecutors aren’t doing anything. This is going to be a challenge for the state’s ability to collect taxes on it.
What kind of tax revenue are we talking about?
Colorado generates more tax revenue from cannabis sales than alcohol or tobacco. It collected $423 million last year on $2.2 billion in marijuana sales. I think New York could exceed those figures because its population is much larger than Colorado’s, and it gets lots of tourists, too.
Didn’t recreational weed just become available in New Jersey?
It did on April 21, and in the first month the state reported $24 million in sales from just 12 dispensaries, none accessible by public transportation. New Jersey is drawing customers from New York and Pennsylvania. The governor of Pennsylvania really wants to legalize recreational cannabis, but for now New Jersey has the first-mover advantage.
Is federal legalization next?
Not for a long time, especially if Republicans regain control of Congress. So long as it remains a state matter, marijuana supply chains must be confined within a single state, and this poses challenges for those entering the business. As an example, Boston Beer Co., which makes Sam Adams, is experimenting with non-alcoholic cannabis beverages. But transporting the product across state lines is a problem.
Will the day come when bodegas sell weed like they sell beer and cigarettes?
That day might already be here. The smell of marijuana is everywhere.