In 2024, the U.S. cannabis industry experienced a paradox: while legal sales increased by $1.3 billion to reach $30.1 billion, the sector lost over 15,000 full-time jobs, marking a 3.4% decline from the previous year. This data comes from the 2025 Cannabis Jobs Report, issued by cannabis staffing firm Vangst in collaboration with Whitney Economics, which examines job growth, revenue trends, and workforce dynamics across all regulated markets.
The total number of full-time equivalent jobs in the cannabis sector now stands at 425,002. This decline in employment contrasts sharply with the 4.5% growth in sales year-over-year. Karson Humiston, CEO of Vangst, noted that the industry is transitioning from rapid growth to a focus on operational discipline. Despite the drop in jobs, cannabis remains a leading employment sector in the U.S.
This employment contraction is the first significant decline since the post-pandemic boom, which saw the industry expand rapidly from 2017 to 2023, adding hundreds of thousands of jobs. However, 2024 introduced challenges such as increased taxation, oversupply, and regulatory hurdles, all of which contributed to this job loss.
Employers responded to these pressures by adopting leaner staffing models to maintain profit margins. Instead of hiring more full-time employees, many companies turned to temporary or seasonal labor, particularly in cultivation and processing sectors.
The report highlights a diverse landscape across different states. States that recently launched or expanded adult-use cannabis programs saw notable job growth, while established markets faced significant job losses. For instance, Illinois, which imposes a steep effective sales tax rate of 36.25% on cannabis, saw consumers opting for cheaper options in neighboring states. This tax burden, combined with competition from hemp-derived THC and the illicit market, limited legal market participation and further restricted hiring.
The financial realities of the cannabis industry are stark; only 27.3% of cannabis businesses reported profitability in 2024, with another 40% breaking even. This has led many companies to restructure rather than expand their workforce. Instead of increasing headcount, businesses prioritized short-term or seasonal labor, cross-functional teams, and efficiency improvements.
Despite stalled federal reform efforts, including a postponed DEA hearing on cannabis reclassification, some states continue to drive growth. New York is expected to nearly double its retail sales, while Ohio’s adult-use market is expanding. Maryland, despite raising its cannabis tax from 9% to 12%, is also forecasted for growth. Conversely, California, Illinois, and Washington continue to grapple with high taxes and sluggish consumer engagement.
Looking forward, Vangst and Whitney project that legal cannabis sales will reach $34 billion by the end of 2025, reflecting a 13.1% increase from the previous year. The rebound in job numbers will hinge on market stability, consumer migration to legal markets, and potential tax or compliance relief. As Beau Whitney, chief economist at Whitney Economics, stated, the industry is not experiencing a slowdown, but rather a strategic reset aimed at adapting and preparing for the future.
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