By Andrew Duffy, CEO & Founder, SparkPlug
I’ve been working in cannabis long enough to recognize the pattern. Every few years, a wave of optimism hits: federal reform feels imminent, capital pours in, and expectations accelerate faster than reality. Then momentum stalls, the market tightens, and the industry reminds everyone that cannabis doesn’t reward speed—it rewards endurance.
That context matters, because despite the volatility, cannabis today is already a real, scaled industry. Over the past decade, it has grown from roughly a $3 billion market into a $30 billion one. That growth didn’t happen all at once. It came state by state—first Washington and Colorado, then larger population centers like California and New York, with states like Pennsylvania and Florida likely next.
Each new state adds consumers and opportunity, but also complexity. The result is an industry that has expanded rapidly while operating under fragmented rules that shape how companies survive.
Retail is still where outcomes are decided
SparkPlug started with a simple observation: frontline retail employees influence what people buy. In cannabis, where consumers often rely on education and recommendations, that influence is especially powerful. If you educate and incentivize those employees, you can move real volume.
That core insight still holds, but our understanding has grown. Today, SparkPlug functions as a coordination co-pilot for brands and wholesalers that want to influence what actually happens inside physical stores. That includes point-of-sale staff, but also promotion timing, inventory visibility, and how products show up on the shelf.
This matters because more than 80 percent of commerce in the U.S. still happens in physical retail locations. Digital tools are critical, but the final decision is often made face-to-face.
The impact is tangible. Retailers are able to offer employees the equivalent of a one- or two-dollar-per-hour raise without paying for it themselves, funded by brand marketing budgets. That reduces turnover, improves morale, and increases sales. In some cases, frontline workers earn an additional $20,000 a year through SparkPlug on top of their wages. That changes lives—and it changes how people think about working in retail.
Why survival matters more than growth charts
Around 2021, a large amount of capital flowed into the cannabis ecosystem, particularly into ancillary technology companies. That moment coincided with peak zero-interest-rate behavior and peak optimism about federal reform.
When reform didn’t arrive as quickly as expected, capital formation became much harder. Many companies struggled. Some didn’t make it.
In cannabis, success is spelled survival. Staying alive matters because the underlying opportunity hasn’t disappeared—it’s been delayed and fragmented. The companies that endure are the ones positioned to benefit when the structure finally changes.
Federal momentum feels different this time
I’m cautious by nature when it comes to predictions. Anyone who has been in cannabis long enough learns to be. But the current moment does feel meaningfully different.
For the first time, there is visible bipartisan support at the executive level for rescheduling cannabis. Public opinion has already settled. More than 70 percent of Americans believe cannabis should be legal in some capacity, whether medical or recreational.
That support cuts across party lines because the issue touches freedom of access, medicine, economics, and personal liberty. Those ideas aren’t owned by one side of the aisle. They resonate broadly—and that creates real momentum.
Pent-up infrastructure and the importance of interstate commerce
One of the most underappreciated realities of the U.S. cannabis market is how much infrastructure already exists, waiting to be used efficiently. Because legalization has happened state by state, we’ve built cultivation, manufacturing, and distribution systems that can’t yet function as a national supply chain.
California is the clearest example. There is enormous cultivation capacity there that cannot legally serve other states. Excess production often leaks into the illicit market, while other states grow cannabis locally that doesn’t need to be grown there at all.
Federal legalization and interstate commerce would reshape the industry almost overnight. It would allow cannabis to mature like other consumer packaged goods categories, with rational supply chains, scale efficiencies, and better alignment between production and demand.
The tax problem no one can ignore
Taxes are one of the biggest structural burdens facing cannabis businesses. Beyond state excise taxes at the counter, federal tax code 280E prevents cannabis operators from deducting most normal business expenses.
The result is effective tax rates that can approach 60 to 70 percent. If 280E were removed, many cannabis businesses would become profitable immediately. That single change would relieve enormous pressure, make state-level taxes workable, and reduce incentives for consumers to remain in the illicit market.
California shows what happens when taxes get too high. When legal prices drift too far from illicit ones, consumers make predictable choices.
Potency, responsibility, and real tradeoffs
There is a serious conversation happening around high-potency cannabis products and adverse outcomes. Those concerns deserve to be taken seriously. Widespread high-dose consumption has consequences, and pretending otherwise doesn’t help anyone.
But society already manages similar tradeoffs with other substances. The difference between low-dose and high-dose cannabis is comparable to the difference between beer and vodka. Both exist. Both are consumed responsibly by many people. Both create real problems when misused.
What often gets overlooked is the broader public-health context. Research shows that when cannabis is legalized, opioid consumption and opioid-related deaths decline significantly—sometimes by as much as 30 percent. If we care about addressing the fentanyl crisis and deaths of despair, cannabis is part of the solution.
Why the market looks the way it does today
Cannabis businesses respond to the consumers they have. Today, heavy users who purchase based on THC content drive a large share of revenue. The mainstream consumer many brands want—the low-dose, highly branded, occasional user—remains a smaller portion of total volume.
As stigma declines and regulation becomes clearer, that will change. A broader consumer base enables more diverse products, lower doses, and more sustainable business models. Structural change accelerates that shift.
Looking ahead
Cannabis has never been an easy industry. It has faced prohibition, over-regulation, capital whiplash, and public skepticism for decades. What gives me confidence is that the fundamentals are strong. Demand is real. Infrastructure is built. Public support is clear.
The companies that survive this phase aren’t waiting for a miracle. They’re building responsibly, staying grounded in retail reality, and positioning themselves for the moment when the rules finally catch up with the market.
That moment feels closer than it has before.
