Despite near-term headwinds, operators remain cautiously optimistic

RALEIGH, N.C. – Feb. 26, 2025 – First Citizens Bank today released key findings from its 2026 State of the Cannabis Industry Report, offering a data-driven snapshot of market conditions shaping the U.S. marijuana and hemp sectors. The report finds that despite negative revenue growth in parts of the industry, expectations for improved performance remain strong with 87% of cannabis companies anticipating positive revenue growth in 2026, up from 66% projecting growth in 2025.

Despite the positivity at the individual company level, after more than a decade of steady expansion, the U.S. cannabis industry is expected to record its first year-over-year revenue decline for 2025, driven largely by sustained pricing pressure and widespread oversupply across many regulated markets. Total U.S. cannabis sales in 2025 are estimated at $28.6 - $29.6 billion, down from approximately $30.1 billion in 2024, even as unit volumes remained stable to positive in select states. Industrial hemp represented a notable bright spot in 2025, and the hemp-derived THC beverage market in particular recorded more than $1 billion in sales.

“Pricing pressure, policy uncertainty, and uneven access to capital are forcing operators to adjust how they plan and manage their businesses,” said Ryan Palmquest, Head of Cannabis Banking at First Citizens Bank. “At the same time, many remain cautiously optimistic about the year ahead, as the potential marijuana rescheduling efforts could ease tax burdens and increase access to financial services for operators.”

Policy Remains the Defining Variable, Spurring Active Engagement
Federal policy continues to rank as the most influential external factor shaping company performance, with nearly half of survey respondents (46%) citing federal policy as having the biggest impact on their business in 2025, followed by the macroeconomic environment and price compression and license saturation.

Cannabis operators are increasingly engaged in policy discussions shaping the industry’s long-term trajectory with half (48%) of respondents reporting active involvement with trade organizations. Lobbying and advocacy spending remained stable or increased for most respondents in 2025.

Capital Access Improves—Unevenly
Access to financial services continues to ease, though unevenly. On average, founders provide 60% of company capitalization, underscoring the industry’s continued reliance on self-funding. Banks (31%) have emerged as the most reliable source of external financing, followed by private lenders or high-net-worth individuals (21%) and friends and family (20%). Bank lending remains predominantly asset-based, with 74% of loans secured by real estate, reflecting the importance of collateral in underwriting decisions.

“Cannabis operators are navigating a more complex and mature operating environment,” Palmquest added. “This year’s findings reflect an industry adapting to the evolving landscape, while continuing to look for opportunities to grow and strengthen their businesses.”

About the Report
The 2026 State of the Cannabis Industry report provides cannabis industry data and statistics on the economic, policy and financial forces shaping U.S. cannabis and hemp businesses.

This cannabis market analysis draws on operator surveys, proprietary banking data and economic research from First Citizens Bank and Whitney Economics, revealing how businesses are navigating pricing pressure, regulatory change and uneven access to capital entering the new year.

First Citizens Bank’s Cannabis Banking business specializes in financial services tailored to the unique needs of cannabis- and hemp-related companies. With a team of dedicated bankers, the Cannabis Banking business supports clients through a full suite of banking products and services.

About First Citizens Bank
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. Headquartered in Raleigh, N.C., First Citizens has built a unique legacy of strength, stability and long-term thinking that has spanned generations. First Citizens offers an array of general banking services with branches and offices nationwide; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; innovation banking serving businesses at every stage; and a nationwide direct bank. Parent company First Citizens BancShares, Inc. (NASDAQ: FCNCA) is a top 20 U.S. financial institution with more than $200 billion in assets and a member of the Fortune 500™. Discover more at firstcitizens.com.

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Media Contact
Liz Shapiro
Elizabeth.shapiro@firstcitizens.com