The U.S. cannabis industry continues its impressive growth, generating over $32 billion in annual retail sales as of 2024, according to data from LeafLink. This marks a 10.8% year-over-year increase, with $2.8 billion in sales recorded in October 2024 alone. From its humble beginnings, cannabis now operates in 41 states, with over 80% of Americans having access to it.
Despite challenges like price declines, margin pressures and operational inefficiencies, the industry is on track to reach $55 billion by 2030, driven by regional growth and federal policy changes.
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Key Growth Drivers
Near-term growth will be fueled by rapid licensing and retail expansion in emerging markets such as New York, New Jersey and Ohio. Over the next 2-3 years, 5,000 non-MSO retailers are projected to open in key states, increasing store counts by 70%.
Federal policy reform, notably the potential reclassification of cannabis to Schedule III in 2025, could relieve the current 280E tax burden and inject $2-3 billion annually into the industry, boosting profitability.
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State-Specific Insights: Strong Performers and Untapped Potential
The cannabis market shows significant variance across states.
Top Performers
- Alaska leads in sales per resident, driven by tourism, followed by Michigan and Nevada, with the latter benefiting from Las Vegas tourism, achieving the highest sales per dispensary.
Room For Growth
- California leads in overall sales but lags in per capita sales. Illinois and Florida show strong sales but lower per capita, signaling opportunities for deeper market penetration. Florida is poised for growth once recreational cannabis is legalized.
Emerging Markets
- New York and Ohio show lower sales per resident but have large population bases and expanding retail infrastructures, making them prime candidates for long-term growth.
- Cannabis companies operating in New York include Curaleaf Holdings, Inc. CURLF, Ayr Wellness Inc. AYRWF, Green Thumb Industries GTBIF, Trulieve Cannabis Corp. TCNNF, Verano Holdings Corp. VRNOF, and Ascend Wellness Holdings AAWHAAWHF. In Ohio, key players include Vext Science VEXTF, The Green Organic Dutchman TGODF, Cresco Labs Inc. CRLBF, and Harvest Health & Recreation HRVSF, which is now part of Trulieve.
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Strategic Opportunities
Wholesale cannabis sales are projected to reach $11.7 billion in 2024, an 11% increase from 2023. However, monthly fluctuations require strategic planning for both sellers and buyers. In October 2024, wholesale sales dipped 2% from the previous month but rose 9.6% year-over-year.
Seller Impact
- Sellers in Massachusetts, Michigan, and Illinois see robust demand, while those in Maryland and Michigan face pricing pressure, with Maryland’s prices falling 23.2% and Michigan’s dropping 14.1%.
Buyer Impact
- Buyers can capitalize on price dips, particularly as some states, such as Arkansas and Washington, saw price increases of 20.7% and 17.9%, respectively, while Maryland and Arizona saw declines.
Pricing
- In October 2024, the average flower price was $1,065 per pound, down $100 from the summer peak of $1,152. The price drop reflects typical seasonal oversupply from outdoor harvests in states like Michigan and Arizona. At the same time, reduced cultivation in mature markets like California, Oregon, and Colorado should help stabilize prices.
- Maryland experienced a 23.2% price drop, while Arkansas saw a 20.7% price increase year-over-year. States like California and Arizona, facing oversupply issues, may see stabilization as cultivation is reduced.
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Emerging Hotspots
Markets like Missouri and Maryland are showing strong growth. Missouri generated $6.5 million in sales per dispensary in 2024, while Maryland reached $11.6 million per retail license. Arkansas, with its limited number of permits, is generating $7.6 million per license, signaling robust demand in a limited-license environment.
By contrast, Oklahoma has the lowest sales per license, at just $0.4 million, due to oversaturation with over 1,800 licenses, presenting opportunities for consolidation or increased operational efficiency.
Long-Term Outlook: A $55 Billion Industry by 2030
The U.S. cannabis industry is projected to reach $55 billion by 2030, driven by retail expansion in states like New York, New Jersey, and Ohio, as well as continued growth in mature markets like Illinois and Florida.
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Source Acknowledgment: This article is based on insights from LeafLink’s Fall 2024 U.S. Cannabis Industry Report and other relevant industry data. All projections and trends discussed are sourced directly from the report, which includes sales figures, state-specific insights, pricing trends, and wholesale dynamics for the cannabis sector.
Disclaimer: The projections and data shared in this article are based on the most current information available as of the Fall 2024 report. Results may vary, and the cannabis industry is subject to ongoing regulatory changes, market fluctuations, and shifts in federal policy.
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