Over the past ten years, the American cannabis industry has undergone considerable change, with both the East and West Coasts playing essential roles in shaping its growth. The West Coast—especially California—has long been a hub for cannabis production and culture, while the East Coast is quickly catching up and making its presence known. This article examines the current state of the industry on each coast and what lies ahead.
West Coast: Trailblazers Now at a Crossroads
States like California, Oregon, and Washington were early adopters of recreational cannabis legalization, securing the West Coast’s status as a foundational market. California, home to the world’s largest cannabis economy, is expected to see a 3.4% dip in sales—dropping to $4.72 billion in 2024 from nearly $4.9 billion in 2023. Experts attribute this downturn to rising excise taxes, which are set to increase from 15% to 19% in 2025, and a decline in the number of licensed cultivators.
The region’s long-standing reputation for premium cannabis is rooted in its ideal cultivation environment. Northern California’s Emerald Triangle—composed of Mendocino, Humboldt, and Trinity counties—offers fertile soil and a climate well-suited to growing cannabis, helping maintain the area’s high-quality standards.
Nevertheless, the West Coast is contending with persistent illegal activity in the form of unlicensed dispensaries and unauthorized grow operations. These black-market players sell products without taxes, often at significantly lower prices than legal retailers, thereby undercutting legitimate businesses and depriving the state of valuable tax revenue.
East Coast: Rising Contenders with Expanding Markets
On the opposite side of the country, the East Coast is witnessing rapid cannabis sector development, led by states like New York, New Jersey, and Maryland. New York’s regulated cannabis market is projected to hit nearly $1 billion in sales in 2024—up dramatically from just $160 million in 2023. This growth follows crackdowns on illegal retailers, which have led to the closure of numerous unlicensed shops and the confiscation of unregulated products.
Maryland has also seen exponential progress in its adult-use market since legalization began in July 2023. In February 2024 alone, sales across all cannabis product categories rose by more than 100%, with some segments increasing by as much as 249%.
Despite this momentum, the East Coast is not without its hurdles. Market growth in states like Connecticut has been slower than anticipated, hampered by regional competition and regulatory limitations that affect product diversity and pricing.
Looking Ahead: Opportunities and Obstacles for Both Coasts
Both coasts show promise for the cannabis sector, though each faces distinct challenges. The West Coast needs to tackle high taxation and rampant illegal operations to maintain its dominant position. Reworking tax policies and improving enforcement against non-compliant businesses could revitalize the legal marketplace.
On the East Coast, attention is focused on building out the regulatory framework and expanding access to legal retail. Virginia, for example, forecasts nearly $300 million in revenue over six years if a retail cannabis market is fully implemented. However, political resistance—such as gubernatorial vetoes—could stall that progress.
A common thread running through both coasts is the struggle to rein in the black market. In New York, for instance, unauthorized cannabis shops continue to thrive by offering untaxed, untested products—posing both economic and public health concerns.
Final Thoughts
As the U.S. cannabis industry continues to mature, the West and East Coasts each face their own set of opportunities and challenges. The West must innovate to combat overregulation and a deeply rooted black market, while the East works to build sustainable legal frameworks amid regional competition. For both regions, solving these issues will be critical to unlocking the full potential of a legalized and thriving national cannabis economy.