The cannabis market continues to evolve. Despite more than two decades of legal cannabis at the state level, a national framework has yet to develop. This has made it difficult to forecast financials accurately, particularly for multistate operators. However, the maturation of new markets has allowed operators to learn from the past while looking to the future.
Across the United States, wholesale flower prices decreased by 56 percent between 2015 and 2024, according to data from Cannabis Benchmarks. While prices have remained fairly stable over the past couple of years — landing around $1,000 per pound on average — a changing political landscape has led many to wonder what’s next.
For many forecasters, the outlook is murky.
“[This year] will be a mixed bag in terms of wholesale pricing,” said John Manlove, chief executive officer at cannabis wholesale platform ApexTrading. “In legacy markets, many have reached a price floor of around $650 per pound, which is the reality operators are facing. In these markets, you are going to see continued market consolidation, whether through M&A or operations closing for good as they struggle to make money.”
Manlove added newer markets, which usually experience sky-high prices followed by compression, will see ramped-up production, which will bring about a downward price trend. According to recent reports, Ohio already is experiencing contraction just five months into legal adult-use sales.
That’s not to say bad news is the only news. Some analysts who spoke with mg Magazine suggested there could be a light at the end of the tunnel — though, they admitted, the possibility is a long shot. From the Farm Bill to AI, here’s what’s likely to drive wholesale prices in 2025.
Regulatory uncertainty sees speculation on either side
The million-dollar question for the cannabis industry this year centers on federal regulation. Will rescheduling actually happen? And will the perceived “loophole” in the 2018 Farm Bill that has led to a boom in intoxicating hemp products close? At this point, no one knows how things will shake out, but both possibilities could have major impact.
“We’re in a state right now of severe and significant regulatory uncertainty,” said Jonathan Rubin, chief executive officer at New Leaf Data Services (parent company of Cannabis Benchmarks). “Rescheduling is essentially in a state of limbo, and we have an expired 2018 farm bill that needs to be addressed.”
Rubin said the farm bill likely would have more impact on wholesale flower prices than potential rescheduling. Currently, demand for hemp flower has increased due to the proliferation of intoxicating cannabinoids like THC-A and Delta-9 THC. Hemp products are not held to the same regulatory standards as legal cannabis and are widely available directly to consumers in many states — including states where significant cannabis reform has yet to take place.
If legislators decide to place restrictions on intoxicating hemp, the move could lead to higher demand for legal cannabis and a decrease in unregulated and untested hemp flower, affecting prices across the board.
Cutting-edge tech boosts efficiency, bottoms out prices
Another variable Rubin believes is affecting wholesale flower pricing is research and development. Cannabis cultivation has advanced by leaps and bounds in the past decade, deploying automation and other high-tech solutions meant to maximize efficiency and boost yields. This equates to a lower cost of goods sold and, consequently, lower prices at wholesale.
Furthermore, a rise in autoflowering and triploid genetics is hastening the plant life cycle and improving the percentage of female plants. These recent advancements allow growers to turn around better products at a faster rate than ever before.
“They are improving germination rates, shortening the flower cycle, and reducing hermaphroditic plants,” Rubin explained.
While technology has made cultivation easier and arguably more efficient, Rubin says it’s negatively impacting wholesale flower prices. However, he suggests there is one societal element that could be a game-changer in the months ahead.
The X factor
As the number of net new customers in the cannabis space increases, so does demand. Daily cannabis consumption already has surpassed daily drinking, and Gen Z is especially prone to pick flower over a frothy beer. According to a 2022 New Frontier Data survey, 69 percent of people aged 18 to 24 prefer cannabis to alcohol.
As more young adults hit the milestone age of 21, they likely will celebrate at a dispensary instead of a bar. Rubin believes this is the “X factor.”
“The liquor industry is having a real tough time in many markets,” he said. “The fastest-growing categories are THC- and CBD-infused drinks and nonalcoholic beer. If the next generation of 21-year-olds consumes less alcohol and more cannabis, that will increase demand and could affect prices.”
While one generation of adults may not dramatically move the needle, the fact that more Americans across the board are picking THC drinks instead of boozy seltzers certainly could. If the pending farm bill leaves the hemp-derived delta-9-THC market in untouched, demand for hemp flower certainly will increase — and more operators may consider trading their cannabis license for a hemp license.
Stay agile
The cannabis industry can be challenging, especially for cultivators. But a decrease in production costs and whispers of reform could boost bottom lines even if wholesale flower prices continue to decline. While none of the experts could make firm predictions as to what 2025 will hold, there’s no doubt change is coming.
FAQ
How much do dispensaries pay per pound of cannabis in 2025?
Dispensaries typically pay around $1,000 per pound for cannabis flower. That price falls to around $650 per pound in older, more mature markets where competition is higher.
What’s the projection for cannabis sales in 2025?
The cannabis industry is projected to make more than $35 billion in sales in the United States during 2025, according to analysts at Whitney Economics.
How much will the cannabis industry be worth by 2030?
The United States cannabis market’s revenue is projected to reach more than $67 billion by 2030, according to analysts at Whitney Economics.
How much will the U.S. cannabis industry be worth by 2035?
In 2035, the United States cannabis industry is expected to make $87 billion in cannabis sales.
