The US legal cannabis industry is in a transitional phase, according to a new report, which showed jobs falling despite revenue increasing.

Vangst’s latest annual Cannabis Jobs Report, produced in collaboration with Whitney Economics, found that employment across the cannabis industry dropped by around 3.4% in 2024 to 425,002 full-time equivalent jobs, representing a decline of nearly 15.5k roles.

However, the industry’s collective retail sales grew by 4.5% in tandem with this decline, topping $30.1bn throughout the year.

This, according to the report’s authors, represents a recalibration of the industry as it matures and adapts to new pressures.

Vangst’s Founder and CEO, Karson Humiston, explained: “The cannabis industry has shifted from a phase of hypergrowth to one of operational discipline. This recalibration reflects a maturing industry focused on sustainability and efficiency.”

This was echoed by Beau Whitney, Chief Economist at Whitney Economics, who suggested this was part of a ‘strategic reset’, rather than a slowdown: “The industry is adapting, adjusting, and preparing for its next chapter”.

The most mature markets, such as Illinois, California and Colorado, have shifted their priorities to operational efficiency, while temporary and gig work in the sector is on the rise as companies seek to remain agile.

Market saturation and generally higher taxes in these more mature markets have, in turn, driven higher job losses.

California lost nearly 1,100 cultivation licenses and saw job numbers fall by 3,995 in 2024. In Illinois, a 36.25% effective sales tax rate has driven consumers to neighbouring states with lower taxes, resulting in stagnant growth.

Arizona and Colorado also saw massive job declines of -52%, and -9%, respectively, due to oversupply, high taxes, and reduced consumer participation.

“The basic regulatory structure for cannabis operators has not significantly changed for over a decade,” said Whitney. “Regulators have been so focused on public safety that they have neglected the health of the operators they regulate”.

Conversely, emerging markets like New York, Mississippi and Ohio saw job markets surge in 2024.

New York added over 8,400 cannabis jobs, a 209% year-on-year increase, following the opening of more than 200 retail stores and the issuance of 743 new licenses, while Ohio and Mississipi saw jobs increase by 34% and 103% respectively.

Looking ahead, 2025 is projected to be a year of cautious optimism. National cannabis retail sales are forecast to hit $34 billion, a 13.1% increase. However, hiring may continue to lag unless policy reforms unlock greater market efficiencies.