The U.S. legal marijuana industry posted its first national revenue decline in 2025, even though more states legalized cannabis, however federal rescheduling could help reverse the trend. The market still remained large, with 2025 sales at $29.1 billion and employment at 412,500 workers as of early 2026.
Vangst and Whitney Economics found that the market contracted in 2025 because of price compression and oversupply, which lowered wholesale prices and squeezed operators’ margins. Consumers generally paid less, but businesses faced rising costs for fuel, utilities, and other services. The report also says basket sizes stayed about the same or slightly higher, while transaction values were flat or down.
Cannabis employment fell 2.7 percent in 2025, but the decline was uneven across states. New York added 16,160 jobs and reached 28,660 total, making it the nation’s third-largest cannabis employer, while Maryland and Ohio also posted gains. California remained the largest employer with 57,500 workers, even though older markets such as California and Michigan experienced broader losses.
Most job losses came from mature or near-mature markets where much of the consumer base has already been captured. Illinois was singled out as a problem market because high taxes pushed some consumers and jobs into the illicit market or into neighboring states. Looking ahead, the report expects cultivation jobs to keep shrinking as regulators reduce license counts and harvest capacity to balance supply and demand.
Whitney Economics expects revenue growth to return in 2026, with more hiring shifting toward manufacturing while retail staffing stays steady. The report projects U.S. marijuana revenue of $30.5 billion in 2026, $33 billion in 2027, and $43.3 billion by 2030. It also says federal rescheduling could improve bottom lines by allowing Schedule III tax treatment and access to deductions that are currently blocked by IRS Section 280E.
The impact of rescheduling is still uncertain and could take months or years to work through federal and state rules. Cannabis market performance depends heavily on regulation, not just legalization itself. 2025 was a turning point: the first nationwide revenue dip, but also a possible setup for a rebound if policy and market structure improve.
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