2025 sees Fewer Jobs in the US Cannabis Industry
In 2025, the legal cannabis sector in the United States underwent a significant adjustment. Although sales rose by 4.5% in 2024, reaching $30.1 billion, employment in the industry decreased by 3.4%, resulting in 425,002 positions. This apparent contradiction highlights a major shift in the sector's operating model.
What are the Structural Challenges in the Legal US Cannabis Market?
The report by Vangst and Whitney Economics identifies three key factors that impacted employment:
1. Lack of profitability due to excessive tax and regulatory burdens.
2. Market saturation, leading to plummeting prices and reduced profit margins.
3. High state taxes are driving consumers toward the unregulated market.
In 2024, only 27.3% of operators were profitable, while 40% managed to remain solvent. Many companies were thus compelled to reduce staff or adopt more flexible hiring practices, such as temporary or project-based work arrangements.
Rapid Expansion Moves to Strategic Hiring
In the initial years following legalisation, the industry experienced rapid hiring. Today, the focus has shifted towards operational efficiency, emphasising smaller, more versatile teams. While 15,000 net jobs were lost in 2024, this transition signifies a growing maturity within the sector.
Emerging Markets on the Rise
While established markets like California, Colorado, and Illinois faced stagnation, other states saw significant job growth. Among the states that created the most jobs are:
New York: +8,450 jobs
Ohio: +2,496 jobs
New Jersey: +2,763 jobs
Missouri: +1,884 jobs.
These states benefited from competitive access, low taxes, and expanded licensing, which were crucial in driving legal participation and job creation.
The Role of Licensing
The number of regulatory licenses serves as a direct indicator of the dynamism of cannabis employment. In 2024, New York added 743 new licenses and opened more than 200 stores, boosting both sales and hiring. In contrast, states with limited licensing or complicated regulatory environments experienced a decline in employment.
Expectations for 2025
The outlook for 2025 is optimistic, with revenue projected to increase by 13.1%, reaching $34 billion. However, any recovery in jobs will depend on several factors, including demand, prices, and potential federal reforms. While an immediate change in federal policy is not anticipated, the cannabis industry continues to be a significant economic driver in regulated states. The critical factor will be to strengthen regulatory frameworks that encourage legal participation and enable businesses to operate profitably.
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Liz Filmer
