Despite legalization disappointments from 2024, the cannabis industry is far from standing still as the calendar changes over to 2025.

A significant factor is that use of the plant continues to expand. And a key driver of that is hemp products. But the battle between federally legal hemp products and state-legal marijuana products will likely come to a truce of sorts.

The CEO of Seattle-based Cycling Frog put it succinctly to Green Market Report: “By this time next year, I don’t think we’re going to be having much conversation about the war between marijuana and hemp because every marijuana company is also going to be a hemp company.”

Additionally, integrating intoxicating hemp into legal cannabis channels could add $10 billion in revenue – a 30% increase over current levels, according to Morgan Paxhia, co-founder and managing partner at Poseidon.

That’s not the only shift cannabis operators will need to make, as consumer preferences are also shifting. Casual, on-the-go options are proving more popular for many post-pandemic – especially as wallets tighten. That means continued increases in sales of beverages, pre-rolls, gummies and vaporizers – and as a result more options from established operators are also making their way to dispensary shelves.

“Gen Z cannabis consumers are increasingly turning to vape pens over traditional flower,” said CCELL’s Nick Kovacevich, pointing to Headset data showing 37.9% of young consumers preferring vapes to flower’s 32.5%.

Federal legalization efforts

While those trends will be key to growth in 2025, efforts to reschedule cannabis – or even fully legalize it – at the federal level continue to overshadow most other discussions. The administrative hearing granted by the Drug Enforcement Administration was pushed into this year, but bickering over the witness list continues.

Industry leaders, however, remain optimistic. TerrAscend’s executive chairman, Jason Wild, took it a step further, saying he doesn’t think the industry will wait for a DEA decision. TerrAscend is involved in a federal lawsuit asserting that the commerce clause has already effectively made cannabis legal, and Wild believes that if the case reaches the Supreme Court, it’ll face “a panel of judges who are likely to view our argument favorably.”

On top of that, the expected pick of Robert F. Kennedy Jr. to head the Department of Health and Human Services “is a good sign for the rescheduling process in February, with implementation likely in 2026,” Paxhia said.

Paxhia also thinks the incoming president’s choice for the next attorney general, Pam Bondi, may support more state control over cannabis policy.

Hurdles remain

Paxhia, however, warned that “reform-dependent” businesses face a tough path as cultivation capacity expands and prices continue their downward spiral in mature markets.

“Companies reliant on federal reform for survival face heightened risk,” he said, predicting many won’t survive through 2025 as cultivation capacity expands and prices continue their descent in mature markets.

The solution?

“Tuck-in acquisitions will allow leading companies to deepen vertical integration within their core markets,” he suggested, adding bluntly that “survival equates to success.”

The industry is ripe for such a shift, according to Viridian Capital Advisors; the largest companies are still only worth around $2 billion – pretty small versus leaders in other industries.

“No major U.S. industry has a leading player anywhere near that small,” the firm wrote. “So, as much as one side of the cannabis cultural divide likes to bemoan the hegemony of the big bad MSOs, we believe that the biggest of them need to become much, much bigger!”

However, there are signs that de-consolidation might also be possible. Viridian’s valuation gap measure – the difference between how the market values large versus small operators – has inverted for the first time in their four-year tracking history, suggesting the market might be calling for the decoupling of operators rather than more megamergers.

Every year in cannabis is a wild one – and 2024 was no exception. From lawsuits to legalization. Green Market Report’s coverage of the industry spanned a wide range of topics.

As we prepare to head into a new year, we’re taking a moment to highlight the stories that piqued your interest over the past 12 months.

Many cannabis jobs require you to be more than just a stoner, but a posting by Custom Cones USA wasn’t asking for much more than that.

Billed as “the Ultimate Stoner Dream Job,” Custom Cones put out a call for content creators, writers, videographers and social media gurus to smoke test the latest cannabis products, be part of the best cannabis industry events, and share those experiences with the world.

Based on the response to this story, we’re guessing the company’s inbox was flooded with interested applicants.

A federal racketeering lawsuit filed in Georgia in February alleged that California cannabis brand leaders STIIIZY and Cookies – along with 12 co-conspirators – illegally sold marijuana products that had been intentionally mislabeled as federally legal delta-8 hemp goods. It also asked for a minimum of $150 million in damages.

The lawsuit highlighted the ongoing battle between regulated cannabis and intoxicating hemp, a battle that likely won’t be disappearing anytime soon, especially in states where marijuana remains illegal or, in the case of Georgia, where the industry is still getting its footing.

A defining characteristic of the legal U.S. cannabis market is the fact that each state acts as its own independent market. That makes it more difficult for brands to take broad market share. But a report released in September showed that some edibles brands have been able to overcome that hurdle.

In September, the Securities and Exchange Commission (SEC) finally charged Ignite International Brands Ltd., Paul Bilzerian, and six others for improperly recognizing and reporting revenue in 2020.

Green Market Report previously wrote in 2022 that the SEC was suing Ignite Brands Ltd. for failing to produce documents as it attempted to pursue an accounting fraud investigation. Ignite wanted the investigative subpoena “stayed” as the criminal authorities conducted a criminal investigation. The SEC argued at the time that just because the company was facing multiple investigations, it couldn’t ask the SEC to stand down.

The rise in what is now being labeled as “intoxicating” goods has blurred the lines between hemp and marijuana, and is reshaping both industries. Corporate cannabis took notice, and an array of well-known brands jumped in on the action, from Curaleaf to Cookes; (Mike) Tyson 2.0 to Jeeter.

The legal anomaly established by the 2018 Farm Bill opened a floodgate of possibilities for companies.

Rounding out the Top 10

6. The DEA marijuana rescheduling comment period is over. What’s next?

7. Million-dollar dispensaries could soon be worthless

8. Cannabis rescheduling faces uphill battle, but DEA decision expected soon

9. Planet 13 sues Casa Verde for fraud in sprawling cannabis financial dispute

10. Kentucky, Wisconsin lawmakers introduce marijuana legalization bills