Puerto Rico’s cannabis business has injected $35,900,000 to the Puerto Rican economy, and generated close to 1,000 direct and indirect jobs, according to estimates from the Puerto Rico Medical Cannabis Association (PRMCA).

The association’s president, Ingrid Schmidt, said the estimate is based on conversations with industry entrepreneurs and professionals.

The PRMCA itemized the estimated investment as follows:

Dispensaries: 27 approved and operating withlicenses, with an average initial investment of $200,000 per license. Additionally, there are nearly 100 dispensaries withlicense applications in progress.

Laboratories: Two approved andlicensedoperating, with an average initial investment of $750,000 per license. There are also two laboratory license applications awaiting approval.

Manufacture and cultivation: Five approved and operating licenses, with an average initial investment of $3.5 million per license. There are also more than 20 license applications in progress.

Cultivation centers: Five approved and operating licenses, with an average initial investment of $2 million per license.

Legal patients: 8,000

But what impact do these numbers have on the rest of Puerto Rico’s ‘economic ecosystem’?

Economist Indira Luciano explained that there is a multiplying effect for every dollar invested in an economic sector, causing a ripple effect in other sectors as well. By using the Planning Board’s multipliers in terms of production, employment, and wage income per sector, Schmidt—who is also an associate professor at theUniversity of Puerto Rico, Río Piedras campus—was able to provide the following information:

For each job created in the operational phase of the cannabis manufacturing sector, 6.32 indirect and induced jobs are generated in other economic areas.

For each production dollar generated during the operational phase of a dispensary, $6.15 is generated in associated economic sectors.

As for wages, for each dollar paid in wages for direct jobs in the cannabis manufacturing sector, $2.84 is generated in salaries for indirect and induced employment.

Therefore, the cash that flows throughout the various cannabis sectors (manufacturing, cultivation, dispensaries, transportation) has a ripple or multiplying effect on other areas of the economy. This analysis is only valid for the operational phase of the business, not during the initial investment.

Nonetheless, the Economy professor emphasized that, to be able to determine job creation, there should be an itemization of how the initial investment of $35.9 million was spent. We would need to see which industry the money went to, to be able to calculate its multiplying effect in terms of indirect and induced employment and the wages earned in these.

Luciano also remarked how important it would be for the government to establish a system to collect this economic data. She said that, otherwise, we would not be able to fully comprehend the real impact of the cannabis sector on our economy.

The economist concluded by reiterating that during the recent public hearings on Bill 340, the Treasury Department reported $100,000 had been collected—corresponding to sales and dispensing—from the moment the medical cannabis industry began. The agency also estimated this economic sector would yield more than $100 million a year in collections, out of which $30 to $60 million would come from the Sales and Use Tax (IVU). The remaining collections would come from created jobs, business income taxes, license fees, and other taxes.

* First of a series of stories, as part of a collaboration between NotiCel.com and Moña.com. Find it during the month of July!