Joining thousands of mom-and-pop businesses and American households, cannabis is another industry hit hard by the shutdown The ongoing federal government shutdown which began October 1, 2025 is reshaping spending behavior in several consumer categories — notably those tied to discretionary goods such as marijuana and alcohol. With paychecks delayed for hundreds of thousands of federal workers, and everyday Americans facing persistent inflation and rising costs, spending is beginning to come under strain. And with thousands of mom and pop businesses, cannabis is another industry hit hard by the shutdown like retail, grocery and dining. According to a survey by Ipsos in October 2025, a majority of people at every income level reported cutting back on at least one expense amid economic uncertainty, tariffs and the shutdown. Another data point from TransUnion shows that 52 % of consumers in Q2 2025 reduced discretionary spending — the highest share in months. The shutdown’s direct ripple effect on consumer wallets is real. Roughly 700,000 federal employees are furloughed, and nearly as many working without pay — which means delayed incomes and fewer dollars available for non‑essentials. Even more broadly, the Council of Economic Advisers warns that a month‑long shutdown could reduce U.S. consumer spending by as much as $30 billion. For the cannabis industry (medical and recreational both), the implications are significant. While the sector continues to grow in many states, the shutdown is freezing key reform efforts — for example, regulation of hemp‑derived THC and federal policy remains in limbo. Concurrently, budget‑tight consumers are being more selective with how they deploy their discretionary dollars. While exact national figures for cannabis spending drops during the shutdown are not yet published, the confluence of reduced incomes + high living costs + regulatory uncertainty suggests a tightening belt is very much in play. Retailers and dispensaries in profit‑sensitive markets may feel the pinch first. It’s worth emphasising the income angle here. According to data from the Federal Reserve’s Economic Well‑Being of U.S. Households in 2024 report, 39 % of adults live in families with incomes of $100,000 or more. By contrast, the implication is that around 61 % of adults live in households with income under $100K. Those households are less buffered from shocks like a missed paycheck, rising utility bills, or price increases. On inflation specifically, a note by RBC points out that Americans earning less than $100K have seen grocery prices rise 33 % since 2019, compared to 25 % for those earning more than $150K. In short: the under‑$100K cohort is both larger in number and under more cost‑pressure. Given this, it’s no surprise we see signs of belt‑tightening amongst this group. The KPMG Consumer Pulse Survey reports that “consumers expect to spend less across most categories this summer — except increases in groceries and automotive.” KPMG For cannabis vendors, this means a shifting consumer base: more value‑seeking, more conservative purchasing, more emphasis on cost‑efficiency (as the Fresh Toast article highlighted). Alcohol spending may also be more vulnerable. While long‑term data show alcohol consumption trending down in some segments, the immediate dynamic here is one of substitution or reduction: when paycheck‑uncertainty and rising rent/food bills dominate, spending on “extras” tends to drop. The shutdown exposes a deeper fault‑line: public policy and everyday economic reality are diverging. The Speaker of the U.S. House of Representatives, Mike Johnson, has adopted a hardline posture on several fronts — including opposition to major healthcare subsidies, blocking full funding of federal agencies and resisting broader cannabis reform efforts. In doing so he appears detached from both: the majority of Americans who earn under $100K and are scrambling to make ends meet, and the broader public’s shifting views on medical marijuana and hemp reform. While polls show majority support for medical cannabis access and broader reform, the GOP Congress remains stalled. That impasse matters because for the cannabis industry — which is still suffering under federal ambiguity — policy action isn’t just nice‑to‑have; it’s a lifeline. The leadership’s lack of responsiveness to that reality sends a signal beyond the Hill: it tells everyday consumers, and businesses, that their pressures may not be fully appreciated by those in power. If the shutdown persists, we can expect: Further reductions in discretionary spending among households under $100K as paychecks and benefit flows remain uncertainSlower growth for cannabis retailers in mature markets, a greater emphasis on value plays and lower‑price substitutionElevated risks for the industry as regulatory and policy advances are paused, making cost control and margin optimization more urgentA heightened political risk for leadership whose policy stance appears misaligned with the economic burdens faced by a majority of AmericansThe shutdown isn’t just a headline about federal funding. It is a real‑world brake on consumer spending, a warning sign for lifestyle markets like cannabis and alcohol, and a reminder policy‑making ignoring everyday economic pressures runs the risk of being out of touch.

The Fresh Toast is a daily lifestyle platform with a side of cannabis. For more information, visit www.thefreshtoast.com.

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