As Adult-Use Landscape Expands, More Americans Than Ever Can Access State-Legal Cannabis

With four more states legalizing adult-use cannabis last year, more Americans than ever now live in state-legal cannabis jurisdictions. While the adult-use market continues to face growing pains—especially in more mature states like California and Colorado—the rising tide of legalization has seen the industry continue to expand overall, with investment bank TD Cowen tabbing the annual increase at 11% to $29 billion in 2023.

Maryland, Minnesota, Ohio, and Delaware all saw legalization measures last year, joining other recently legalized states like New York, Connecticut, and Missouri. All but Ohio legalized through their state legislatures, with the Buckeye State seeing voters approve adult-use sales via a ballot initiative. Overall, 24 states across the U.S., plus Washington D.C., have legalized adult-use.

Maryland got off to a fast start, launching sales on July 1, with total adult-use cresting $270 million through November, plus another $430 million in medical sales. Minnesota is expected to roll out adult-use sales in early 2025. But the industry has gotten a head start in the state via the hemp-derived cannabinoid market, with beverage alcohol retailers and others already stocking THC beverages and receiving an enthusiastic consumer response. (In fact, across the national market, the hemp-derived cannabis segment—which is active across 32 states—is estimated to rival that of the adult-use and medical sectors combined.)

Missouri, which benefited from a thriving medical market, soared to become a billion-dollar market since launching adult-use sales last February. The rollout in New York has been much more sluggish, totaling only $100 million in its first 10 months, but could accelerate looking ahead as the state removes roadblocks to licensing new operators and multi-state players join the adult-use sector.

Two big medical markets—Florida and Pennsylvania—have the potential to follow Missouri’s lead. Florida has an adult-use ballot initiative in the works for 2024, while Pennsylvania legislators have put forth legalization proposals and governor Josh Shapiro is in favor. While progress is far from assured this year, if those large states fall into place the East Coast market will be a lot closer to fulfilling its vast potential.

“With legislative catalysts in Florida, Ohio, Pennsylvania, we estimate our adult-use retail footprint to increase nearly six times by 2025,” said Ayr Wellness CEO David Goubert. “Ayr has 88 retail stores across our footprint today. Of those, only 15 are adult-use.” For the year ahead, Goubert sees multi-state players continuing to sharpen their focus on their best-performing markets, as has been the case with Curaleaf, Trulieve, and Cresco. “Companies with larger brand portfolios will start slimming down and condensing their brands to allow for a more meaningful resonance with consumers in the markets where they are sold,” he said.

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