National cannabis wholesalers are navigating a market defined by uneven demand growth, persistent price compression, and rapid category mix shifts. While total U.S. legal sales are still expanding, the growth is modest and highly state-dependent, forcing wholesalers to recalibrate assortments, pricing, and credit terms by market maturity and regulatory climate. Recent economic models project U.S. legal retail sales of roughly $34 billion in 2025 (about +13% year over year), underscoring that demand remains resilient even as operators contend with margin pressure.
Wholesaling into Price Compression
The single most universal trend wholesalers report is price compression—especially in mature states. New York’s 2024 statewide market report, which benchmarked mature markets like Colorado, Oregon, and Massachusetts, documents steep multiyear declines in average retail prices; Colorado’s average market rate for wholesale flower fell dramatically from 2014 to 2023, and per-gram retail pricing has dropped by more than two-thirds in several mature markets. This cascades upstream: when retailers lower shelf prices to stay competitive, they pressure wholesale transfer prices, thinning distributor margins.
Fresh price reads remain volatile. Cannabis Benchmarks’ U.S. Spot Index in late May 2025 printed at roughly $997 per pound (about $2.20/gram), reflecting an environment where wholesale quotes can swing quickly as inventories and seasonal harvests shift. In oversupplied states such as Oregon, regulators and media have highlighted how record harvests continue to weigh on pricing and margins for producers, manufacturers, and distributors—conditions that ripple through wholesale channels.
Category Mix: Pre-Rolls Up, Flower and Value Vapes Fight for Share
Wholesalers also continue to see a meaningful mix shift toward pre-rolls, particularly infused SKUs, which command premium price points per unit even as base flower prices compress. Industry reporting shows infused pre-rolls holding more than 40% share of the pre-roll segment in the first half of 2024, signaling sustained consumer appetite for potency and convenience. That mix shift has operational implications for wholesalers—more complex bill-of-materials, tighter QA for homogenization and infusion, and higher working capital needs for packaging inputs.
Beyond pre-rolls, wholesalers report a bifurcation in vapes: value distillate SKUs remain traffic drivers in price-sensitive markets, while live resin and rosin carts defend premium tiers where brand and terpene fidelity matter. Category dashboards and industry reports continue to be core references for planning SKU velocity by market and demographic.
Read More: Flower and Vape Products: Analyzing Market Velocity and Consumer Trends
Beverages: Small Base, Outsized Growth—Market by Market
THC beverages remain a niche share of total sales nationally, but growth pockets are drawing wholesale attention. Recent data shows beverages more than doubling year over year in Michigan (+112%), with strong gains in Ohio (+79%) and Illinois (+47%), even as Arizona and Colorado contracted. For wholesalers, that creates selective opportunity: align with markets where regulatory frameworks, retail refrigeration, and consumer trial activation (e.g., single-serve cold chains) are in place.
Retail Footprint and State Rollouts: Expansion Lifts Volumes Unevenly
Another core dynamic wholesalers are living with is uneven store expansion. New York, for example, is scaling its legal storefront count rapidly in 2025 after a slow start; more stores typically translate to more doors for distributors—and more fragmented demand planning in the near term. But not every large state is growing: California’s legal market has shrunk roughly 30% from its 2021 pandemic peak, with tax headwinds and illicit competition impacting retail throughput and, by extension, wholesale turns.
Working Capital, Payment Terms, and Risk Management
Price compression and retailer stress have pushed wholesalers to re-evaluate payment terms and credit exposure. While this pressure doesn’t always show up in topline market reports, it’s a widely discussed operating reality: in slow-pay markets, distributors are shortening terms, tightening customer underwriting, or leveraging consignment-like structures to reduce cash-flow risk. In oversupplied states, this often coincides with higher returns and write-downs on aging inventory as brands churn and retailers rationalize menus. Market commentary on oversupply in states like Oregon reinforces why conservative inventory turns and demand-driven purchasing are now standard practice.
Brand Consolidation and SKU Rationalization
With shelf resets accelerating, wholesalers are experiencing faster SKU rationalization cycles. Buyers are asking for proof of velocity—by market, by store cluster, by consumer segment—before onboarding new products. Store-level analytics and syndicated dashboards are increasingly embedded in wholesale line reviews, and operators are pruning long-tail SKUs that don’t clear minimum weekly sales thresholds or that complicate pick/pack with limited margin contribution. These practices are consistent with broader analytics-driven decision-making highlighted in industry research.
Tactical Implications for Wholesalers
Price architecture by market maturity. Mature states demand EDLP-style wholesale pricing and bundle deals to defend volume; emerging states allow for more premium positioning but carry regulatory and rollout risk. Benchmarks and state reports suggest building bid/ask bands that anticipate 5–15% intra-quarter swings.
Double-down on winning forms. Infused pre-rolls remain a national bright spot; ensure co-packing partners can scale infusion with consistent burn and compliance. Where beverages are expanding (MI, OH, IL), prioritize refrigerated logistics and single-serve, sessionable SKUs.
Data-led SKU curation. Use sell-through and substitution analytics to rationalize SKUs ahead of retailer resets. Brands with clear terpene storytelling and differentiated inputs defend margin better than “me-too” distillate flavors.
Tighten cash discipline. Shorten terms in slow-pay regions, incentivize early payment with incremental discounting where lawful, and avoid over-ordering in harvest windows that historically trigger price dips. The oversupply narrative in several Western states reinforces the need for conservative turns.
Plan around regulatory cadence. Store-count ramps (e.g., New York 2025) can temporarily distort demand planning; stagger deliveries and use pop-up assortments to seed velocity before committing to deep inventory.
Outlook: Cautiously Constructive
Macro forecasts vary by source, but consensus suggests continued national growth in 2025 even as individual state trajectories diverge. Analysts and economists expect demand to be supported by new adult-use openings and gradual consumer base expansion, while headwinds—illicit competition, taxation, and oversupply—continue to suppress pricing. In other words, wholesalers should assume that unit volumes can grow while dollars per unit remain under pressure. Winning wholesalers will be those that (a) specialize in fast-moving categories like infused pre-rolls while (b) building optionality in beverages and premium solventless vapes where local demand warrants, and (c) institutionalize data-driven line reviews and disciplined terms management to protect working capital. The market is still growing; the playbook is simply getting sharper.