According to a recent story in the Seattle Times, there are now three cities in the US where cannabis usage among adults exceeds that of cigarettes: San Francisco, Portland and Seattle.
Not surprisingly, all three cities happen to be situated in states – California, Oregon and Washington – where adult recreational cannabis is both legal and widely available for purchase.
What implications might this phenomenon hold for the cannabis market?
A key question hanging over the long-term future potential of the industry is whether the number of adult recreational users is fixed or growing.
If the user base is relatively fixed, then current growth is being fueled by a shift from the black market. Under this scenario, as legalization advances, the rate of growth would be expected to moderate.
That eventual outcome seems, however, to ignore a basic aspect of consumer behavior, which is that things change all the time. Especially in the case of cannabis, where the stigma of being outlawed and the risk of going to jail for personal consumption is finally coming to an end. Pot was seen – incorrectly – as a gateway drug. Now we understand the health risks were wildly exaggerated and the potential health benefits simply ignored altogether.
Meanwhile, a truly dangerous product, cigarettes, which had an allure of sexiness up until about 50 years ago, has been fighting – and mostly losing – an uphill battle against the near universal proliferation of smoke-free venues, the burden of high taxes and a steady drumbeat of health warnings.
The leading drivers of economic growth in each of these three cities where cannabis outranks tobacco is tech, which tends to attract a workforce with above-average levels of education.
Not surprisingly, given the demands among potential employers, Seattle and San Francisco also rank as the two highest cities as by the percentage of adults who hold a bachelors’ degree, and Portland comes in at seventh, according to a 2019 study of the 50 largest urban areas in the nation.
Seattle, now my hometown, wasn’t always a technology mecca. When I first moved to the Pacific Northwest in 1990, the aerospace giant Boeing was by far the largest employer in the region. While we weren’t quite Detroit, Seattle was in many respects still a factory town where a union job at an aircraft assembly plant was a ticket to the middle class.
Boeing is still a big employer, but all of the region’s growth over the past few decades has come from tech, an industry whose model is to amass human capital and race to innovate faster than the competition. As a result, tech companies are typically intense, demanding work environments. Not exactly suited for the stereotypical stoner.
But we live in an era when stereotypes of all kinds are falling by the wayside, reflective of ways of thinking that are increasingly foreign to a modern generation.
Maybe the notion that someone who enjoys cannabis is by definition lazy and unambitious is yet another one of those outdated stereotypes which needs to be cancelled.
But don’t ask me. I just live here. Where the workplaces are intense, and the cigarette smokers are fast disappearing. But if you look closely, you’ll see a new consumer trend emerging.