In this article, we are going to discuss the city with the highest weed consumption in the US. If you want to read about other cities that smoke the most pot, check out our complete list of the 20 Cities with the Highest Weed Consumption in the US.
Cannabis Industry in the United States:
The United States of America is the country that smokes the most weed in the world. The American legal cannabis industry fared well in 2023, as according to Whitney Economics, legal sales across the 38 states that allow some form of regulated marijuana reached $28.8 billion, a 10.3% increase from the previous year. Meanwhile, the legal cannabis industry also added 22,952 new jobs last year – a sign that the business climate has stabilized somewhat nationally after the turmoil of the previous two years. The increasing legalization of cannabis and rising acceptance of its use for medical purposes are the key factors driving the growth of the market.
Growth is also expected to come from new markets, as states like South Dakota, Florida, and Nebraska are expected to have marijuana legalization on November ballots. As of the writing of this article, 24 states have legalized recreational weed in America, in addition to the District of Columbia.
Problems Faced by the Legal Cannabis Industry:
One of the biggest issues faced by the American cannabis industry is federal illegality, which makes the cost of doing business for weed companies higher than any other business. Due to the difference in federal and state marijuana laws, cannabis companies cannot receive traditional banking or loans, forcing them to resort to high-interest options. They also don’t have bankruptcy protections like traditional businesses so when these companies falter, receivership is one of their few options. Similarly, insurance comes with sky-high costs as well.
Another big barrier to making money is the enormous amount of taxes weed companies pay because they’re treated like illegal narcotics traffickers under the federal tax code. The goods also cannot cross state lines and that lack of interstate commerce means companies must build separate farms, factories, and stores in each state where they do business and navigate a rapidly evolving patchwork of state regulations.
Additionally, the constantly narrowing gap between supply and demand has caused prices to nosedive. The tough competition from the black market also puts pressure on legal retailers to keep prices low. The increasingly strong position of Donald Trump in the upcoming presidential election is also a worrying sign for the country’s cannabis sector, as Republicans have historically been more wary than Democrats about legalizing marijuana for recreational use
A combination of the aforementioned factors and more have driven America’s legal cannabis industry into a corner and Whitney Economics has revealed that the U.S. legal cannabis market has a total of $3.8 billion in delinquent payments – equal to nearly two months’ worth of the total retail sales in 2023. Meanwhile, a survey conducted last month by the Minority Cannabis Business Association has revealed that only 27% of U.S. legal cannabis operators are currently profitable, with 41% breaking even, and 32% losing money. The situation is even worse for non-white businesses, of which only 17.5% are profitable. According to the U.S. Chamber of Commerce, 65.3% of all small businesses in the country are profitable, so these figures are well below the national average.
A New Hope:
Having said all that, a silver lining has recently appeared for the American legal cannabis industry. In May, the U.S. Justice Department officially proposed a new rule that would reclassify marijuana from a ‘Schedule I’ drug, which includes heroin and LSD, to a less tightly regulated ‘Schedule III’ drug, which includes ketamine and some anabolic steroids. The decision marks a major policy shift by the federal government and while it would neither make the substance legal nor decriminalize it on a federal level, it would recognize the medical uses of cannabis and acknowledge that it has less potential for abuse than the other more harmful drugs. According to the MCBA, the rescheduling could also add 55,500 jobs by 2030, generating up to $2.7 billion in wages and $5.6 billion in new economic activity.
Another significant benefit of the reclassification is that it could add fresh arguments for supporters of ballot measures seeking to legalize cannabis in states where it is still illegal. But perhaps the ones benefiting the most from this change are cannabis companies, which after the rescheduling would no longer have to follow tax provisions under a rule called 280E, which prevents them from taking standard business tax deductions. The MCBA estimated the industry has overpaid $2.2 billion in taxes compared to other sectors due to this restriction.
Although the rescheduling is far from the federal legalization that the cannabis industry is so desperately waiting for, it is a step in the right direction. As a result, several marijuana companies have expressed some much-needed optimism following the announcement, including Tilray Brands, Inc. (NASDAQ:TLRY) – one of the Biggest Marijuana Companies in the World.
Irwin Simon, the chairman and CEO of Tilray Brands, stated the following in the company’s Q3 2024 earnings call transcript:
“In the U.S., Tilray has multiple options and, in particular, is well positioned to benefit from the federal legalization of medical cannabis as a result of rescheduling. Yes, we believe that the rescheduling of cannabis from Schedule I to Schedule III in the U.S. would provide a path for Tilray to sell pharmaceutical grade medical cannabis in the U.S. subject to doctor prescriptions.
This is a different strategy from what MSOs are doing today. We believe there’s an opportunity to supply medical cannabis products from our existing operations into the U.S. for medical purposes. Further in the event of a future federal adult-use and medical cannabis legalization in the U.S., we believe Tilray is well positioned to immediately leverage its strong global leadership position, know-how and strategic strengths across operations, distribution and brands to sell THC infused products across its robust distribution network and sales channels in the U.S.”
As a result of the rescheduling announcement by the US Justice Department on May 16th, Tilray saw its share price move up by 6.3%. A day later, the company announced that it had filed for the sale of up to $250 million worth of its common stock through an at-the-market equity program. Tilray Brands, Inc. (NASDAQ:TLRY) plans to use proceeds from the sale to fund acquisitions or investments, including potential purchases of assets in the U.S. ‘in order to capitalize on expected regulatory advancements or expansion opportunities’.
Shares of Tilray Brands, Inc. (NASDAQ:TLRY) were held by 14 hedge funds at the end of Q1 2024, with a collective stake value of over $14.7 million, putting it on our list of the Best Pot Stocks to Buy.
A close-up shot of a cannabis plant, showing its intricate details.
Methodology:
To collect data for this article, we have referred to the 2023 Cannabis Price Index by the CFAH, looking for the American Cities with the Highest Weed Consumption. To keep our list relevant, we have only selected larger cities with populations of 200,000 or more. When two cities had the same consumption of cannabis, we ranked them by their average price per gram of weed.
1. New York, NY
Total Weed Consumption: 62.3 metric tons per year
The Big Apple is the City that Consumes the Most Weed in America. Although New York has finally started the legal sale of recreational cannabis, the state’s budding industry is marred by illegal dealers, which outnumber their licensed counterparts by more than ten times. However, a recent crackdown by the New York State Cannabis Enforcement Task Force is proving to be effective, with 114 rogue stores shut down and over $29 million worth of illegal products seized by last month. Another issue has been the slow rollout of stores due to financing problems. The state has issued 500 licenses for retail stores, but only 85 of those licensees have opened for business.
According to a 2021 survey by the CDC, an estimated 12.6% of New Yorkers aged 18 and older reported using cannabis in the past 30 days, while around 5.9% consumed daily or near daily. However, these numbers are expected to have received a boost since the legal sales for recreational weed started at the end of 2022. The Empire State’s legal cannabis market generated $150 million in sales and $16.3 million in tax revenue in fiscal year 2023, according to a report from the state Office of Cannabis Management.
If you want to read about other cities that smoke the most pot, check out our complete list of the 20 Cities with the Highest Weed Consumption in the US.
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