While initially, many cannabis businesses rushed to expand and hire quickly to position themselves in the market, now, with tighter profit margins, rising regulatory costs, and unpredictable consumer demand, companies are focusing on running their businesses more efficiently rather than growing headcounts.

This shift in staffing has led to smaller, more efficient teams, where employees are trained to handle multiple roles and resources are used more thoughtfully to get better results.

“While total employment numbers have dipped slightly, the industry is maturing into a more disciplined employer segment, prioritizing profitability and workforce stability over rapid headcount expansion,” the report reads.

But there is another aspect to take into account. Full-time hiring is becoming more selective, while short-term and temp-to-hire jobs are becoming more common in the cannabis industry. This is especially true in growing, processing, and manufacturing, signaling that businesses are turning to seasonal and flexible workers to handle flexible demand while also controlling labor costs.

This approach would help companies to continue their operations and, at the same time, give workers a chance to enter the industry, as in many situations, temporary roles can turn into long-term positions.

More Licenses, More Jobs. But Also More Volatility

A look at job trends at the state level reveals that jobs grew in newer markets like New York, Ohio, New Jersey, and Missouri. This is due to an increase in licenses and new retail store openings. This trend helped offset job losses in more established markets such as California, Colorado, Oregon, and Washington, where oversupply, declining prices, and high taxes posed significant challenges.

States like California and Michigan continue to hire more, with 74,623 and 45,000 jobs in 2024, respectively, not just because of their strong revenues but also due to the high number of licenses they issue.

Some of the states with the highest cannabis taxes, such as Illinois, California, and Washington, also experienced the largest declines in employment within the cannabis industry.

The report also noted that “states with relatively unlimited licenses tend to drive the most employment. However, these same states have more churn and downside risks due to over-saturation and price declines,” signaling the natural evolution of these markets as they mature.

But there are also other factors contributing to the job decline, such as price compression caused by oversupply, which has forced many operators to cut costs, including labor expenses.

Meanwhile, the report noted that the lack of federal reforms, such as delays in rescheduling cannabis and changes to banking policies, has prolonged uncertainty.

The report also highlights that this situation would prompt many employers to adopt a cautious approach to hiring, adding that, without significant federal reforms or tax relief, most operators are likely to maintain conservative hiring strategies.