Legal cannabis sales in the US hit $30B in 2024 | How to buy Skittles Moonrock online

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The legal U.S. legal cannabis industry recorded its 11th consecutive year of growth in 2024, though the pace of expansion continued to moderate versus pre-pandemic levels, according to Oregon-based Whitney Economics.

Final retail revenue for the year is estimated between $30.2 billion and $30.7 billion, marking roughly 6% year-over-year growth, the economic research firm wrote in its February newsletter.

However, the industry faced mounting challenges, with nearly 1,000 fewer active business licenses by year’s end versus early 2024, according to state regulatory data analyzed by Whitney. The firm also found only 27.3% of operators nationally reported being profitable.

“Unless there are changes at both the federal and state levels that are more business friendly, the pace of business failures will continue to accelerate,” said Beau Whitney, founder of Whitney Economics.

According to the analyst, Michigan exceeded expectations, reaching nearly $3.3 billion in sales – about $400 million above forecasts – driven partly by out-of-state purchases from neighboring regions. New York also outperformed after regulatory adjustments allowed the opening of around 230 retail dispensaries, hitting $859 million in sales versus $264 million in 2023.

Florida fell short of projections due to a significant slowdown in new medical patient registrations, according to the report. Whitney Economics forecasts slower growth in 2025 for the state, even as multistate operators continue expanding their retail footprint.

“The deployment of more stores will simply lower the average sales per store,” Whitney noted.

Meanwhile, mature markets showed signs of stagnation. Arizona posted negative growth, while Colorado, Oregon and Washington saw demand flatten or decline as they approached market saturation, according to the report.

The data showed a 70% rise in the number of states experiencing declining year-over-year retail revenue. Six mature market states recorded revenue drops totaling $457.9 million, while four emerging markets saw declines of $161.2 million combined.

Whitney Economics attributed slower growth partly to federal inaction on cannabis reform, mentioning hang-ups with rescheduling hearings, while congressional legislation related to banking, tax reform and interstate commerce showed little progress.

“The level of credibility that congress has with the cannabis industry is at an all-time low,” Whitney said in the report.

The firm warned that without policy reforms, the industry could face continued consolidation favoring larger businesses, lower tax revenues, and further job losses despite overall sales growth. The firm pointed to particular strain on women and minority-owned businesses, warning of increased “wealth destruction” for these operators given most loans are debt-related and backed by personal guarantees.

The firm plans to release its 2025 retail demand forecast in its next monthly update.