While the cannabis industry can be lucrative, it is also challenging to navigate, given the ongoing Federal prohibition and the patchwork of state laws regulating the sale of cannabis in either recreational or medicinal channels. As of the writing of this article, President Trump has signed an executive order to expedite the rescheduling of cannabis from Schedule I to Schedule III. The rescheduling process for cannabis has been ongoing, but subject to delays that has cast doubt on whether rescheduling would ever be achieved. The executive order is therefore welcome news to industry. It also extends a potential lifeline to hemp-derived products, which have been subject to stronger restrictions following the passage of the FY26 Agricultural Appropriations Bill. That is to say, 2025 is ending on a positive and hopeful note about the future of cannabis research and business.
Despite the regulatory challenges on the Federal level, the cannabis industry continues to grow. Mature cannabis markets are evolving while newer legal cannabis jurisdictions are opening new doors for entrepreneurs and bringing cannabis products to more consumers. To better understand the cannabis marketplace, Cannabis Science and Technology has partnered with BDSA to review cannabis sales trends and offer insights about how the cannabis space is performing and evolving in existing and burgeoning legal cannabis markets.
Forecast
According to BDSA, U.S. regulated cannabis sales (including adult use and medical) are forecasted to reach $39.1 billion by 2029. In 2025, sales of U.S. adult use cannabis were $23.9 billion and U.S. medical cannabis sales were $7.6 billion (see figures 1 and 2). Of these sales, flower, vapes, edibles, and pre-rolled accounted for the biggest share of the sales with $11.8 billion, $7.7 billion, $4.3 billion, and $4 billion in sales, respectively (see figure 3). While these four categories drive cannabis sales, categories with lower sales performance such as shake/trim/lite, sublinguals, and topicals are projected to see a higher, double digit, compound annual growth rate (CAGR) of 15.4%, 11.4%, and 10.5%, respectively (see figure 4). Of the top selling categories, pre-rolls are expected to see the highest CAGR, with 10% growth. Another category to look out for is the cannabis beverage category. BDSA projects that beverages sold through the dispensary channel will grow $370 million by 2029, a CAGR of 6.1%.
As jurisdictions pass medical and adult-use cannabis legalization, sales are anticipated to grow. For example, in Florida and Pennsylvania, which are major medical cannabis markets, anticipated adult-use legalization is expected to add $1.8 billion to cannabis sales in the U.S. market through 2029 (see figure 5). New York, Pennsylvania, and Ohio are projected to be the top three contributors to U.S. cannabis sales growth by $1.9 billion, $1.5 billion, and $1.1 billion respectively. The top ten U.S. cannabis markets in 2025 and 2029 can be seen in figure 6.
On the whole, by the end of 2025, total U.S. THC sales are projected to reach $96.5 billion. This includes sales from legal dispensaries, the illicit market, as well as intoxicating hemp. THC sales from illicit cannabis accounts for a majority of sales (45%), with projected sales of $43.1 billion, while the dispensary channel accounts for 33% with projected sales of $31.6 billion. Intoxicating hemp accounts for 22% of total U.S. THC sales, projected to reach $21.8 billion.
A Look at Intoxicating Hemp
When the FY26 Agriculture Appropriations Bill was passed in November of 2025, hemp was redefined as "Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a total tetrahydrocannabinols concentration (including tetrahydrocannabinolic acid) of not more than 0.3 percent on a dry weight basis.” Additionally, it stated that finished hemp-derived products cannot contain more than 0.4 mg of total THC and THCA per container, and criminalized "any intermediate hemp-derived cannabinoid products which are marketed or sold as a final product or directly to an end consumer for personal or household use," including cannabinoids synthesized outside of the hemp. This threw a wrench in the controversial intoxicating hemp market.
Prior to the passage of the appropriations bill, BDSA projected that intoxicating hemp would grow at a CAGR of 5.5% from $4.6 billion in 2025 to $5.7 billion in 2029. Edibles captured 27% market share, following by beverages with 21%. The top markets for intoxicating hemp included Texas, Florida, New York, Illinois, and North Carolina, in that order. With the redefinition of hemp and the closing of the so-called loophole used by manufacturers of intoxicating hemp, it’s unclear what will happen to the intoxicating hemp market. It’s possible, based on regulations in certain states that these products may move to dispensaries, but the added regulations and smaller market compared to convenience and liquor stores may remove incentives for manufacturers to participate.
Digging into the Retail Tracking Data
According to BDSA’s retail sales tracking, flowers and pre-rolled are the only major categories gaining dollar sales compared to a year ago (3.8% and 3.4%, respectively; see figure 7). When it comes to flower, smaller pack size drives category dollar sales (see figures 8). The most sales come from 3.5 g pack sizes with $3.3 billion (43% share), though it saw a 10.9% decline in sales compared to the year before. Seven gram and 1 g pack sizes represent 15% and 3% dollar share with $1.1 billion and $254.9 million, respectively, but saw 8.4% and 17.3% growth. Larger pack sizes are seeing growth. For example, 14 g and 28 g pack sizes, which represent 23% and 15% dollar share, saw 27.7% and 14.3% sales growth, respectively, compared to the year before, and pack sizes of greater than 28 g which only represent 1% of market share, grew 218.4% compared the previous year.
“The growth of larger pack sizes is tied to what we see across most categories: consumers want convenience and a good deal. Price pressures have driven down prices nationally, but convenience categories like vape and pre-rolled continue to grow despite being priced higher per gram than flower. Large pack sizes offer consumers the products they want at the best price point,” explained Elisabeth Stahura, co-founder and COO of BDSA. “This growth is more heavily concentrated in mature markets. Consumers in these markets are more experienced with cannabis products and know what they like. They're often more willing to pay a higher upfront cost for a larger pack size because they understand they're getting a better price per gram. In newer markets, consumers are still figuring out what products work for them, so they're less likely to commit to larger quantities upfront.”
Extracts are a niche yet diversified category that is largely seeing some sales decline except for rosin and infused flower, which saw 8.1% and 57.9% sales growth compared to the previous year (see figure 9). Stahura explained that while the extracts category is smaller and more niche, the consumers purchasing extracts are more experienced and knowledgeable about what they’re buying.
“Rosin is growing because it's solventless. Despite often being at a higher price point, more experienced consumers gravitate toward it because the solventless process provides better flavor and a more ‘pure’ product,” Stahura told Cannabis Science and Technology. “The data shows rosin grew 8% in sales year-over-year, and the number of rosin products increased 11%. The average retail price for rosin is $31, significantly higher than most other extract formats, but consumers are willing to pay that premium for the quality.”
Though the beverage category accounts for $198.9 million, it has seen 8.2% growth in dollar sales compared to the previous year. Carbonated beverages lead the pack with $80.9 million in sales and 18.1% growth compared to the previous year, followed by noncarbonated drinks with $65.5 million in sales and 8.1% growth, and shots with $32.9 million and 23.1% sales growth (see figure 10).
“Cannabis beverages have long been talked about as a significant opportunity, and a potential substitute for other adult beverages, including alcohol,” said Stahura. “In the past, several factors limited growth potential of the category including unique flavor and formulation challenges, distribution challenges within the existing regulated cannabis framework, and in-store challenges at dispensaries. Historically, beverages have sat consistently at about 1% of total dispensary sales.”
Though beverages still represent a relatively small total percent of dispensary sales, those sales are growing as product availability has expanded nationally. “While the total number of dispensaries carrying beverages hasn't changed much, the distribution within stores (TDP - total distribution points) has increased by 4%,” explained Stahura. “This means dispensaries that carry beverages are now stocking more variety. This expansion is driven by stores offering more beverage products on their shelves, which has resulted in a 3% increase in total beverage sales in 2025.”
Stahura also points out that the popularity of cannabis beverages in the hemp industry has helped foster more interest in the beverage category overall, “increasing consumer demand and likely encouraging more dispensaries to make room for drink products.”
“What consumers are looking for in these products is good taste and quality formulation,” she adds. “The brands succeeding are the ones with beverage industry expertise who can overcome the flavor challenges and create products that taste good while delivering the desired cannabis effects.”
Cannabinoids
THC-only edibles have the largest dollar share of the category, with 68% and $1954.6 million in sales, but minor cannabinoids are seeing strong dollar growth (see figures 11 and 12). For example, edibles that contain CBD and CBD grew 25.8% with $149.3 million in sales and edibles containing CBG grew 18.4% with $89.5 million in sales.
“Minor cannabinoid products are growing because consumers want cannabis products that help with specific needs” said Stahura. “People are looking for products tied to particular effects like sleep, relaxation, energy, or focus, rather than just general THC or CBD products.”
Sleep is a particularly good example of this trend, Stahura told Cannabis Science and Technology. “Sleep products grew 18% in sales year-over-year. Unit sales grew even more at 27%, and the number of different sleep products on the market increased by 25%,” she explained. “This shows that companies are creating more sleep-focused products to meet customer demand. This growth is directly connected to minor cannabinoids. Sleep products often use CBN or CBN combined with CBD because these cannabinoids help with relaxation and sleep. The strong sales and product growth clearly shows that minor cannabinoid products are pushing the market toward more personalized, benefit-specific options.”
Other targeted benefits that are growing, Stahura pointed out, include pain relief (+73% growth in sales, +78% in units and +51% in number of products), intimacy (+86% growth in sales, +88% in units and +53% in number of products), focus (+42% growth in sales, +58% in units) and relaxation (+34% growth in sales, +50% in units).
Conclusion
U.S. regulated cannabis sales (including adult use and medical) are anticipated to reach $39.1 billion by 2029, supported by sales from flower, vapes, pre-rolled and edibles. Pre-rolled are expected to see particularly high growth (10% CAGR) compared to other top categories. Burgeoning legal cannabis markets are also expected to add billions in sales. While flower, vapes, pre-rolled and edibles are driving the most sales, data shows that smaller categories such as shake/trim/lite, sublinguals, and topicals are expected to see double digit CAGR. Growth in the beverage category (6.1% CAGR by 2029) is also notable, representing a significant opportunity as more consumers become interested in the category and recent legislation effecting hemp-derived products may make intoxicating hemp products less available in mainstream channels. Additionally, cannabis consumers are becoming more interested in more specific benefits, leading to the growth of products that contain particular minor cannabinoids such as CBN and CBG to support outcomes such as sleep.
