Marijuana Moment: Legal Marijuana Revenue Declined For The First Time In 2025, But Rescheduling Could Reverse The Trend, Industry Analysis Finds

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For the first time since state recreational marijuana markets launched in 2014, the industry saw a year-over-year decline in national revenue from cannabis sales in 2025, according to a new economic report. But that trend could soon reverse as state laws evolve, businesses adapt and federal rescheduling potentially creates new opportunities.

In 2025, however, the U.S. Cannabis Jobs Report from Vangst and Whitney Economics found that the market contracted—with $29.1 billion in marijuana sales nationally, a lower total than the prior year even as more states enacted legalization. As the industry has maturated, price compression drove down wholesale prices, while oversupply persisted.

That might have been welcome news for consumers who generally had to spend less on cannabis, but it put a “squeeze on operators absorbing rising costs for fuel, utilities and services,” the analysis found.

“In-store checkout data indicates that the number of items in a consumer’s basket, in most states, remained about the same or slightly increased over the past year,” the report says. “At the same time the transaction value—the total cost of goods in the basket—remained steady or decreased.”

Meanwhile, cannabis sector jobs declined modestly by 2.7 percent last year, according to the report. But as of early 2026, the marijuana industry employed 412,500 U.S. workers.

Despite the broader job decline in 2025, six state cannabis industries did have job growth in the double digits. That includes more recently opened markets such as New York, which added 16,160 jobs last year, reaching 28,660.

New York is “now the nation’s third-largest cannabis employer—driven by new retail licenses and stepped-up enforcement against unlicensed shops,” the report found.

Additionally, Maryland’s marijuana industry jobs grew by more than 3,500, while Ohio saw nearly 2,600 new cannabis workers last year. That helped to offset losses in states like California and Michigan that have older markets that have seen growing pains. Regardless of the job losses in California, the state still remained the top marijuana employer in the U.S., with 57,500 workers, the report says.

“Nearly all of 2025’s job losses came from mature or near-mature markets. Revenue growth rates have slowed,” the report said. “Most of their consumer participation has been captured. Illinois was particularly impacted by high sales taxes that pushed consumers and jobs—out of the legal market or led them to purchase in adjacent states.”

“We expect labor demand to continue its decline in the cultivation sector, as state regulators tighten licenses and shrink harvest capacity to bring supply and demand into balance. At the same time, we forecast a rise in demand for skilled workers in the manufacturing sector, as processed products continue to gain favor among consumers. Retail staff demand will remain strong and steady. We expect most retailers to maintain a steady overall headcount while continually hiring in response to internal employee churn.”

Whitney Economics said its analysis indicates that there will be a return to revenue growth in 2026 as labor demand shifts from cultivation to manufacturing, while retail hiring is expected to remain stable.

The report also notes the possibility that the Trump administration’s move to federally reschedule medical marijuana—and possibly cannabis more broadly through a hearing that’s set to begin this month—could further impact market trends, and it projects that the U.S. marijuana industry will generate $30.5 billion in revenue this year, rising to $33 billion in 2027 and $43.3 billion by 2030.

However, the authors made clear that it’s “too early to tell” how exactly federal reform will influence economic conditions for the industry.

Of course, rescheduling could help marijuana businesses with their bottom lines as far as tax relief is concerned, as businesses marketing Schedule III drugs are able to claim federal tax deductions that have been unavailable to them under an Internal Revenue Service (IRS) code known as 280E.

“Ask five cannabis lawyers to predict the fallout and you’re likely to get five very different answers. Over the past decade we’ve learned through hard experience that rules and regulations are paramount,” the economic analysis said. “A state can vote to legalize adult use, but the size of a market and its rates of expansion are entirely dependent on the regulatory framework established by state officials.”

“We expect a similar dynamic with regard to Schedule III,” it said. “It will take months if not years for federal regulators to establish rules around Schedule III cannabis, and more time after that for state regulators to create their own rules that fit with, or work around, the new federal situation.”

Karson Humiston, CEO of Vangst, said in a press release that “behind every one of these 412,500 jobs is a real person building a career in cannabis.”

“As the market matures, operators can’t afford to over-hire or guess on comp anymore—this data gives them the benchmarks to hire smart and build teams that last,” she said.

Beau Whitney, chief economist of Whitney Economics, echoed that point and said “data and insights are critical for operators, investors and policy makers to leverage in order to make informed decisions.”

“Knowing where the market is headed will enable businesses to not only know their bottom line, but also take proactive steps to remain ahead of the curve and position themselves for future successes,” he said.

The year 2025 may have been the first time that revenue dropped nationally in the marijuana market post-legalization launch, but Vangst and Whitney Economics separately reported on job losses in the industry in last year’s annual cannabis industry report.

Jobs in the U.S. legal marijuana industry fell roughly 3.4 percent percent between 2023 and 2024, the analysis found. “That marked the largest nationwide downturn in cannabis employment since the project began tracking full-time equivalent jobs in the sector in 2017.

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