Emerging Markets Could Push U.S. Cannabis Sales to $60 Billion by 2028

As the U.S. cannabis industry nears $45 billion in national sales by 2025, the distribution landscape is rapidly evolving. With traditional markets maturing, growth is increasingly driven by emerging regions and new channels. Four states and one product vertical stand at the forefront.

Florida & Pennsylvania: The Big Breakthrough States

According to The Wall Street Journal, Florida is poised to vote on recreational legalization in November 2025 — a change that could elevate it to the third-largest U.S. market by 2028, if adult‑use sales begin. Meanwhile, Pennsylvania is also building bipartisan momentum for legalization, with Gov. Shapiro pushing forward. For multi‑state operators and cultivators operating medical programs in these states, the pivot to adult‑use would be a “flip of a switch,” unlocking ten‑fold growth, as noted by TerrAscend’s CEO.

New York & Ohio Gaining Traction

Ohio prepared to launch adult‑use in late 2024, with early projections showing a 44% boost in sales, driven by conversion from medical. New York has already reached over 275 licensed dispensaries, is projected to surpass 625 by 2025, and expects upwards of $1.5 billion in sales. As regulatory kinks smooth out and dispensary counts increase, distribution is poised to diversify across upstate and New York City.

Missouri: Midwest Powerhouse Emerges

Often overlooked, Missouri has rapidly become its 7th-largest state market since legalizing adult-use in 2022. Its low tax rates and fewer licenses have fueled fast growth, along with out-of-state shoppers crossing borders. This shows the distribution upside in non-coastal states, especially in regional hubs with lax taxation and lean regulation.

The Rise of Cannabis Beverage Channels

Beyond state-level trends, product innovation is reshaping distribution models. The global cannabis beverage market, currently valued at $1.3 billion in 2024, is projected to reach $3.1 billion by 2030, growing at a robust CAGR of 16.3%. Thanks to nano-emulsion technologies and collaborations with mainstream beverage brands, cannabis beverages are penetrating mainstream retail—liquor stores, cafes, grocery stores—opening up new, regulated distribution lanes beyond dispensaries.

Drivers of Market Expansion

Demographics & Acceptance: Nearly half of U.S. adults have tried cannabis, and legalization support hovers near 88%. Younger adults and women, in particular, are increasing demand for edibles, beverages, tinctures, and wellness-focused products.
Federal Rescheduling: While full federal legalization remains unlikely soon, a shift to Schedule III could cut business tax burdens and banking friction—accelerating distribution capability.
Supply Chain Efficiencies: Spot market prices have stabilized (~$950 per pound), and cultivation technologies are becoming more efficient, leading to price compression. Lower wholesale costs will ease entry barriers for emerging states.

Challenges Ahead

Regulatory Lag: States like Florida often face regulatory delays in licensing, potentially deferring rollouts into 2026.
Tax & Compliance Pressure: High excise taxes (e.g., California’s jump from 15% to 19%), tension over hemp-derived THC, and rising IRS 280E scrutiny could hinder legal distribution.
Competition & Saturation: Even fast‑growing markets like New York face dispensary saturation, requiring more aggressive consumer acquisition strategies.

Strategic Outlook

By 2026–2028, the major growth engines for U.S. cannabis distribution are expected to include:

Florida
- Expansion of dispensaries tied to adult-use legalization.
- Growth in home delivery services and retail partnerships.
Pennsylvania
- Rapid scaling of medical dispensaries converting to adult-use sales.
- Increased need for secure transport and wholesale distribution networks.
New York & Ohio
- Regional consolidation of distributors and retailers.
- Opening of cannabis lounges and integration of vertical supply chains.
- Growth of consumer packaged goods (CPG) partnerships for branded products.
Missouri & Similar Midwest States
- Emergence of regional distribution hubs serving local and cross-border demand.
- Low-tax and business-friendly environments fostering rapid distributor entry.
Cannabis Beverages
- Expansion of distribution through mainstream retail channels like liquor stores, cafes, and grocery outlets.
- Opportunities in wellness, hospitality, and events sectors as regulations evolve.

This trajectory could lift U.S. cannabis retail sales to an estimated $56–60 billion by 2028, up from roughly $44 billion in 2025.