U.S. Cannabis Market Projected To Reach $34 Billion This Year
May 6, 2025The legal cannabis industry in the U.S. will expand by 13% in 2025 and reach $34 billion, according to research group Whitney Economics. While Whitney is still projecting growth for the industry, they point to new challenges facing increasingly mature adult-use markets across the U.S., including oversupply, taxation, and hemp-derived THC taking market share from regulated dispensary channels. Overall, these developments on legal cannabis have caused Whitney to revise further-out projections downward, with the group now projecting the U.S. cannabis market to reach $62.4 billion by 2030 and $81.3 billion by 2035.
According to Whitney, cannabis production is outstripping demand across the U.S., creating price compression. The report says the effects of price compression are so severe that the situation is impacting state tax revenues and driving cannabis business failure. The firm notes that they will have a more detailed report on supply in the second quarter.
The group’s report also addresses hemp-derived THC, which is often easier to access than regulated cannabis and competitively priced. “Although not an identical substitute, hemp-derived products are also now available to consumers,” Whitney noted. “The consumer now has more options available to procure cannabis products outside of the traditional adult-use or medical regulated channels. With tax prices so high and less legal participation, there will not be the growth in the markets as previously forecasted.”
While Whitney sees greater uncertainty in the cannabis market ahead, there are still expanding markets across the U.S. The group highlights New York and Maryland as two strong markets for this year, noting that since their last projection, both states have been revised upward. The better outlook for these states, Whitney says, comes from New York’s efforts to curtail the black market and Maryland’s still-maturing adult-use segment.
Since the last Whitney forecast, however, a handful of legacy adult-use markets have been given new, largely negative, outlooks. For 2025, Whitney projects that California, Arizona, Colorado, Washington, and Illinois will all decline in value terms.
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