INTELLIGENCE + RISK · National ·
The cannabis industry generates $30 billion in annual legal retail sales in the United States and employs more than 425,000 people. Millennials and Gen Z together account for nearly 63% of all US cannabis purchases, with Gen Z showing 11.3% year-over-year growth in market share; the fastest of any demographic.
Gen Z is not just buying cannabis. They are also the ones growing it, packaging it, and selling it to you at the register. They are the workforce. And they are entering that workforce at a moment when both the industry and their generation share the same structural problem: almost no one taught them how money works.
This is not a character critique of young people. It is a data problem. And when you put the research on Gen Z financial literacy next to the research on cannabis workforce conditions, the picture that emerges is one of compounding damage. Not because workers are failing the industry, but because an industry built on low wages and high turnover, has been deployed against the generation least equipped to absorb its financial consequences.
Gen Z has the lowest financial literacy of any generation
The TIAA Institute and Stanford University’s Global Financial Literacy Excellence Center run the most widely cited annual financial literacy benchmarking study in the United States. In their 2025 Personal Finance Index, Gen Z averaged only 38% correct answers across 28 financial literacy questions — the lowest score of any generation studied.
Baby boomers averaged 55%. Gen X averaged 51%. Millennials averaged 46%. About 37% of Gen Z respondents answered seven or fewer of the 28 questions correctly — meaning more than one in three young adults have financial knowledge that is, by any reasonable measure, nearly nonexistent.
This is not because Gen Z is disinterested. Bank of America’s 2025 Better Money Habits study found that 72% of Gen Z adults took active steps to improve their financial health in the past year. The problem is that they are doing it from a near-zero starting point, largely self-taught, and in real time, while rent is due and the tax bill is coming. Ramsey Solutions’ 2025 Financial Literacy Crisis report found that 87% of all Americans say high school left them unprepared to handle money in the real world, and only 19% of US adults report ever taking a personal finance class in high school. Only 29 states currently require one for graduation.
The cost of that gap is measurable. The National Financial Educators Council’s 2025 survey found that Americans lose an average of $948 per person per year due to gaps in financial knowledge. That figure accounts for poor financial decisions, overpaid fees, missed opportunities, and avoidable tax errors – exactly the kind of losses that pile up invisibly when you do not know what you do not know. For a worker earning $30,000 to $38,000 a year, $948 is not a rounding error. It is a month of groceries and utilities, or a even a 401k contribution.
CivicScience found in 2025 that Gen Z is now the least likely generation to say they feel “very” financially literate, down sharply from 2023, when they had actually outpaced older generations in self-reported confidence. Over half – 55% – do not have enough emergency savings to cover three months of expenses. Nearly half, 43%, say they are not on track to save for retirement in the next five years, even though they want to be.
The job turnover myth and what the research actually says
Cannabis workers get labeled as ‘job hoppers’. So does Gen Z broadly. Both narratives are worth examining against the actual data, because they matter for how we explain the financial damage that accumulates.
A 2025 brief from the National Institute on Retirement Security analyzed decades of Bureau of Labor Statistics data, and found that workers aged 25 to 34 in 2024 had a median job tenure of 2.7 years, essentially identical to Baby Boomers at the same age in 1983, who averaged 3 years.
The job-hopping narrative applied to young workers is not supported by generational data. Young workers have always changed jobs more frequently than older workers. That is not a Gen Z trait. It is a life-stage pattern consistent across every generation on record. So whats the difference?
The NIRS research found something more important: the real drivers of turnover are economic conditions, benefits access, and job quality — not generational attitudes. Industries that offer healthcare and retirement benefits retain workers. Industries that do not, like retail and hospitality, see consistent high churn.
Cannabis sits squarely in the high-churn retail and manufacturing category. Not because its workers are restless, but because its conditions produce the outcome that poor conditions always produce.
The cannabis-specific numbers make that concrete. Headset’s industry analysis found 55% of dispensary budtenders leave within 12 months. NCIA data puts the share leaving within the first two months at nearly 60%. Compare that to the BLS national average annual turnover rate of approximately 47% across all industries in 2021.
Cannabis retail runs well above that. Research found Gen Z’s average tenure in the first five years of their career is 1.1 years – significantly shorter than Millennials at 1.8 years. And not because they are disloyal, but possibly because entry-level job postings have declined 29% since January 2024, leaving fewer stable options, and more frequent transitions.
What matters for this conversation is not why the turnover happens. It is what the turnover prevents. A worker who leaves a cannabis job after six weeks did not stay long enough to see two full pay cycles, ask a question about their tax withholding, make a retirement account election, or make healthcare benefit decisions. The financial education window closes before it opens. Then they move to the next job and the same thing happens again. This is also a vicious cycle for human resources, payroll and accounting. The knowledge gap can drag a lot more aspects of labor behind it then what meets the eye.
What cannabis jobs actually pay (and what that means after taxes)
The cannabis industry has promoted itself as a job creator. And it is.
But the wages attached to those jobs require context. The national median budtender salary is $37,785 per year as of late 2025, according to Salary.com. ZipRecruiter’s dispensary budtender figure is lower, $30,157 annually, or approximately $14.50 per hour. The median cannabis grower earns $35,100 per year, with many entry-level cultivation and trimming roles paying between $13 and $16 per hour.
These wages are not poverty wages in an absolute sense. But they are wages that leave almost no margin for financial error, and they are being paid to a generation that is already operating with a 38% financial literacy rate. Some with no high school preparation, and no employer inside the cannabis space legally permitted to fill the knowledge gap.
The compounding starts immediately.
A worker earning $30,000 to $38,000 who overpays taxes due to a misclassification error, who misses quarterly estimated tax filings, or who opts out of a retirement plan because nobody explained what it costs them loses money they cannot get back. At an average annual loss of $948 per person from financial illiteracy alone, and a working career that could span 40 years, the lifetime cost of entering the workforce without financial knowledge runs well into five figures — and that is before you account for misclassification penalties or compound retirement growth foregone from opting out in your twenties.
The retirement gap: 7% vs. 52%
Only 7% of cannabis workers are currently enrolled in a retirement plan, against a 52% participation rate in comparable industries. That gap does not exist because cannabis workers do not want to save. It exists because of three converging structural problems.
First, banking restrictions tied to federal illegality have kept most mainstream 401(k) custodians out of the cannabis space. In mid-2024, several major custodians exited the industry entirely with little warning, leaving thousands of workers scrambling to find replacement providers.
Second, Section 280E of the Internal Revenue Code prevents plant-touching cannabis businesses from deducting employer retirement contributions, removing the tax incentive that motivates matching programs in most industries. 280E prohibits cannabis businesses from deducting ordinary business expenses at the federal level, which includes employer retirement contributions.
Third, when plans do exist, workers opt out at nearly 32% – one of the highest auto-enrollment opt-out rates documented across any industry.
That opt-out rate connects directly back to the financial literacy data. Bank of America found that 43% of Gen Z say they are not on track to save for retirement in the next five years. Workers opting out of cannabis retirement plans are not making an informed choice to prioritize other investments. They are making the decision most financially under-equipped young people make when presented with a complex financial product they were never trained to evaluate: they decline it and move on.
The average cannabis 401(k) participant is 33 years old with a balance of just $6,547. That represents the minority who have an account at all. For the majority without one, every year of foregone contributions is a year of compound growth that will never be recovered. A single year of $2,000 in retirement contributions at age 24, compounded at a conservative 7% annual return, is worth more than $32,000 by age 65. Workers opting out at 24 are not saving $2,000. They are losing $32,000 – they just cannot see it yet.
Why the employment relationship needs help
The most common response to this problem is that workers should ask their HR departments, their payroll administrators, their accounting staff. And those people should be forthcoming with information.
That response reflects a fundamental misunderstanding of what those roles can legally do. HR generalists, payroll administrators, and accounting staff at cannabis companies are not CPAs. They are not financial advisors. They cannot legally give tax advice, explain the long-term cost of an opt-out decision, or tell a worker whether their 1099 classification is legally defensible. Doing so without licensure exposes both the individual and the company to liability. So the people closest to a worker’s financial situation – processing their paycheck, handing them forms to sign, running their benefits enrollment – are structurally prohibited from providing the information that would make those interactions meaningful.
This is not a failure of any individual company. It is a design flaw built into the employment relationship itself, and it falls hardest on the workers who have the least access to outside financial guidance. Financial education researchers have found that adults who took a personal finance class in high school are five times more likely to say they graduated feeling prepared to handle money in the real world. Most cannabis workers did not take that class. Most of their states did not require it. And their employers cannot compensate for that gap from within the employment relationship.
What compounding actually looks like over time
Gen Z entered the workforce into an economy shaped by pandemic disruption, declining entry-level job availability, and wages that have not kept pace with cost of living. Entry-level job postings have declined 29% since January 2024, with junior roles disappearing across finance, tech, and logistics simultaneously. Cannabis has remained one of the accessible entry points – low barrier to hire, geographically distributed, no degree required.
That is not a criticism. It is a description of why the cannabis workforce skews young and why the financial literacy gap in cannabis is inseparable from the financial literacy gap in Gen Z broadly.
A cannabis worker who enters the industry at 22 and spends three years cycling through two or three dispensary jobs has, in that time, potentially overpaid thousands in self-employment taxes without realizing it, missed quarterly tax filings and accrued IRS underpayment penalties, opted out of or been ineligible for a retirement account, and spent the years of highest compound growth opportunity with no savings and no guidance. Each of these outcomes is more likely than not given what the research tells us about this workforce and this generation.
The industry generated $30.1 billion in sales last year. It employs more than 425,000 people. It has created hundreds of millions in state tax revenue and positioned itself as a social good and a job creator. All of that can be true and still be incomplete if the workers generating that revenue are leaving the industry in worse financial shape than they entered it. Its already happening to the operators; why sink the whole boat?
That is the gap CWR is working to close. In development is our financial literacy program for cannabis workers, which covers tax filing for W-2 and 1099 workers, credit building on modest wages, retirement investing, healthcare navigation, opening a bank account and so much more. If you are a cannabis worker with questions about your finances, or an operator who wants to build something better for your workforce, contact CWR.
Sources: Cannabis Business Times — Vangst 2025 Jobs Report · CannabisMD TeleMed — Gen Z cannabis market share · PSCA / TIAA-GFLEC P-Fin Index 2025 · Carry — Financial literacy by generation 2025 · Bank of America — Better Money Habits 2025 study · Ramsey Solutions — Financial Literacy Crisis 2025 · CivicScience — Gen Z financial confidence 2025 · NIRS — Debunking the Job-Hopping Myth 2025 · Randstad — Gen Z Workplace Blueprint 2025 · Fortune — Gen Z job tenure and entry-level decline · Salary.com — Budtender salary 2025 · ZipRecruiter — Dispensary budtender salary · ZipRecruiter — Cannabis grower salary · MJBizDaily — Budtender turnover 2026 · NCIA — Cannabis employee turnover · SDO CPA — 1099 vs W-2 tax comparison 2026 · IRS — Worker classification 101 · Miller Shah — Misclassified worker IRS risk · Found — 1099 vs W-2 tax planning · UpCounsel — Misclassification rate estimates · UZIO — Cannabis 401(k) access · MG Magazine — Cannabis 401(k) study 2026
CWR is building a financial literacy program for cannabis workers, covering tax filing for W-2 and 1099 workers, credit building, retirement investing, and so much more. Contact CWR to get involved.
