Firearm Economics: Manufacturers on the Move

Written by Orchid

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October 14, 2021

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Across the country, 134,000 federal firearms licensees and related businesses employ more than 340,000 people. That’s according to the ATF’s latest FFL numbers and the “2021 Firearm and Ammunition Industry Economic Impact Report.” Together, the firearms industry contributed nearly $65 billion in economic activity in 2020 – a year in which some 8.4 million new gun owners entered the market, over 10 million guns were manufactured and an estimated 20-40 million were sold – with similar numbers expected this year.

However, despite exponential growth and $7 billion in tax revenue generated last year, not all states are good hosts to the firearms industry. Not only are restrictive states such as California, New York and Massachusetts unfriendly to gun owners, but they’ve made it increasingly difficult for firearm manufacturers and businesses to remain at home. In response, firearm and ammunition manufacturers have moved in droves to friendlier business climates in recent years to escape challenging legislation, including the likes of Beretta (Maryland to Tennessee), Stag Arms (Connecticut to Wyoming), Weatherby (California to Wyoming), Kimber (New York to Alabama) and, most recently, Smith & Wesson (Massachusetts to Tennessee).

“We are under attack by the state of Massachusetts,” said Smith & Wesson President and CEO, Mark Smith, following the announcement of their move. “In order to preserve future jobs and for the viability of our business in the long term, we are left with no choice but to relocate these functions to a state that does not propose burdensome restrictions on our company.”

Smith & Wesson’s move will relocate upwards of 750 jobs from its Massachusetts, Connecticut and Missouri facilities to Maryville, Tenn., adding to the 7,800 firearms industry jobs already in the state. Ranked 15th in total firearms industry jobs, the Volunteer State is also among the top 10 states in excise tax and job growth – rankings established prior to Smith & Wesson’s announcement. Unsurprisingly, Massachusetts and Connecticut were among the top states in total economic output in dollars and per capita, respectively, largely thanks to Big Blue.

Of 342,330 firearms industry jobs reported in 2020, 45% were directly related to manufacturing, distributing and selling firearms, 23% were supplier related and the remaining 32% were in ancillary industries. Leading the U.S. in total firearms industry jobs are Texas, California, Florida, Illinois, Pennsylvania, Minnesota, North Carolina, Ohio, Missouri and Georgia ­– who account for 45% of all jobs – while West Virginia, Wyoming, New Mexico, Vermont, Alaska, North Dakota, Rhode Island, Hawaii, Delaware and Washington, D.C. round out the bottom 10 states.

For states in the middle, the lure of new jobs and tax revenue is too enticing for some to pass up. Oklahoma Rep. Kevin West recently met with the House Business and Commerce Committee to discuss ramping up firearm manufacturing in the state.

“These are good paying jobs, stuff that Oklahomans can just move right into,” said West. “Several of the surrounding states, Texas and Arkansas specifically, have made a lot of moves in the last 10 years or so to attract those types of businesses and it’s been a boom for their economy.”

Oklahoma is currently home to over 1,800 FFLs, 453 of which are listed as manufacturers of ammunition (Type 06 FFL) or firearms (Type 07 FFL). Of those, direct firearms businesses employ 2,400 people with another 2,200 in supplier and ancillary positions, ranking the state in the bottom half of the U.S. As a comparison, the firearms industries in Texas and Arkansas employ a combined 33,000 workers.

For firearm manufacturers and FFLs in historically anti-gun states, a major relocation may not be ideal, but neither is remaining in a state with restrictive and overreaching legislation. And with other states eager to attract businesses in need, there’s never been a better time for manufacturers to make a move, both literally and figuratively. Consider states like Vermont, Nevada, Wyoming, North Dakota, and Utah, where industry job growth and economic output is high, or others, like Oklahoma, whose representatives openly welcome the industry and whose translated state motto is “Work conquers all.”

When manufacturers move, the broader impact flows throughout the state and national economy, generating business for firms and creating jobs seemingly unrelated to firearms, further growing the firearms industry and its economic impact.

For help relocating your FFL or firearms business, contact Orchid to discuss operations, regulatory and technology considerations with our in-house industry experts and attorneys.

FFL Strategy & Operations

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