Whitney Economics reports that the U.S. cannabis industry has achieved growth for 11 consecutive years, with the growth rate slowing down.

According to a recent report by Whitney Economics, based in Oregon, the U.S. legal cannabis industry has seen growth for the 11th consecutive year, but the pace of expansion slowed in 2024. The economic research firm noted in its February newsletter that the final retail revenue for the year is projected to be between $30.2 billion and $30.7 billion, marking a modest increase of about 6% year-over-year. As reported by *Green Market Report*, although growth remains steady, the expansion rate of the U.S. legal cannabis industry has slowed compared to pre-pandemic levels and has been declining since the peak of the pandemic. The report also highlighted a more concerning trend: the number of cannabis businesses shutting down is on the rise. By the end of this year, nearly 1,000 active business licenses have been lost, with only 27.3% of cannabis operators nationwide reporting profitability. Beau Whitney, founder of Whitney Economics, warned, “Unless there are more favorable policy changes at both the federal and state levels for cannabis businesses, the rate of business closures will continue to accelerate.”

The report analyzed that Michigan’s sales exceeded expectations, reaching nearly $3.3 billion, about $400 million higher than projected, partly due to out-of-state purchases from neighboring regions. New York also performed well after regulatory adjustments allowed the opening of approximately 230 retail pharmacies, with sales reaching $859 million, a significant increase from $264 million in 2023. In contrast, Florida fell short of expectations due to a sharp slowdown in new medical patient registrations. The company predicts that despite interstate operators continuing to expand retail operations, the state’s growth rate will slow in 2025. Whitney noted, “Deploying more stores will only reduce the average sales per store.”

Meanwhile, signs of stagnation have emerged in mature markets. The report stated that Arizona experienced negative growth, while demand in Colorado, Oregon, and Washington has plateaued or slightly declined as these markets approach saturation. Whitney attributed part of the slowdown in the U.S. legal cannabis industry’s growth to federal inaction on cannabis reform, including stalled hearings on cannabis reclassification and legislative stagnation in Congress regarding banking, tax reform, and interstate commerce. Whitney emphasized, “The level of trust in the cannabis industry by the U.S. Congress has hit a historic low.”

The report pointed out that government inaction has led to a 70% increase in the number of states experiencing year-over-year declines in retail revenue. The total sales revenue in six mature market states decreased by $457.9 million, while revenue in four emerging markets dropped by $161.2 million. The agency warned that without cannabis policy reforms, despite overall sales growth, the industry could face continued consolidation favoring large corporations, declining tax revenues, and further job losses. Women and minority-owned businesses, in particular, are under greater pressure. Given that most loans are debt-based and require personal guarantees, the “wealth loss” for these operators will worsen further.