The dream of legal weed was supposed to mint millionaires.
Instead, it’s creating bankruptcies.
Across the US, cannabis companies are collapsing under impossible taxes, plunging prices and brutal red tape.
Even celebrities once hyped by the ‘green rush’ – from Jay-Z to Whoopi Goldberg – have seen their plans go up in smoke.
‘The US cannabis industry is on its last breath,’ Beau Whitney, founder of Whitney Economics and former cannabis CEO, told the Daily Mail.
‘We’re witnessing an extinction-level event for small operators.’
According to his data, only 27 percent of US cannabis firms are profitable, 40 percent are just breaking even, and a third are losing money outright. Across other sectors, nearly two-thirds of businesses make money.
‘The system wasn’t built to succeed – it was built to control,’ Whitney said. ‘State legislatures and regulators have set the industry up for failure.’
Whoopi Goldberg, pictured above with her hemp-beverage Whoop-Tea, is among the celebs to have struggled in America’s legal weed market
Cannabis stores and farms across the US have shuttered amid regulatory hurdles and a thriving black market of tax-dodging vendors
Thirty-nine states and Washington, DC, now allow medical cannabis, and about half have legalized adult use. Ohio joined the party in 2024, and Nebraska approved medical marijuana the same year.
The legal industry still rakes in $30 to $35 billion a year and supports roughly 420,000 jobs. Demand is solid, driven by Millennials and Gen Zers buying edibles and THC drinks.
But rules differ wildly by state. Some restrict dispensaries to big cities, and others ban them entirely.
That patchwork keeps the black market alive – with up to 75 percent of sales still off the books.
Whitney said California produces up to 22 million pounds of cannabis a year, but can legally sell only a quarter of it. ‘The rest goes out the back door,’ he said.
The oversupply has crashed legal weed prices everywhere.
In Massachusetts, an ounce dropped from $394 in 2020 to $145 today. In Michigan, it went from $419 to $84. In California, wholesale prices sank from over $1,000 a pound to about $250.
Whitney told the Daily Mail that as dispensaries slash prices to survive, farmers subsequently quit – he called it ‘a race to the bottom.’
Because cannabis is federally illegal, Section 280E of the tax code bars normal deductions. Many firms pay effective tax rates above 60 percent.
‘Taxes are killing this industry – plain and simple,’ Whitney said.
He estimates the total tax burden will hit $2.3 billion this year and could soar past $5 billion by 2030.
Rapper Snoop Dogg (pictured) has emerged as one of America’s most successful celebrity pot entrepreneurs
Even the weed farmers in the so-called Emerald Triangle of northern California are struggling to make ends meet
Jay-Z, pictured here with wife Beyoncé, launched the Monogram cannabis brand to great fanfare, but it soon began to bleed cash
Boxing legend Mike Tyson smokes weed with pro-wrestler Ric Flair
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