More Than 100 Jobs Cut as Two California Cannabis Manufacturers Downsize

The pain in California's cannabis market just got a lot more personal. Two big manufacturers are cutting more than 100 jobs between them, and both sit in the same city.

CraftForce Services is letting go of nearly 60 workers at its Santa Rosa operation on September 20. That's the manufacturing side of CannaCraft, one of the better-known names in Sonoma County. The company filed a federal WARN notice to make the layoffs official. A few miles away, NorCal Cannabis Co. is cutting about 49 workers on September 13. NorCal runs as GB2 LLC and calls Santa Rosa home too. The Santa Rosa Press Democrat broke that one first, also through a WARN filing.

Bret Peace runs Groundwork Holding, the parent company behind the cuts. He didn't try to spin it. He told the Press Democrat this was a hard call and pointed straight at where the industry has gone. Operators today run leaner, he said, using less space and specialized setups, and his company simply couldn't keep up. His bluntest line summed up the whole problem. The business, he said, "was sized to a scale of industry that didn't materialize."

Who's losing their jobs

At CannaCraft, most of the people getting cut are production technicians. A lot of them belong to United Food and Commercial Workers Local 5. Over at NorCal, the affected workers mostly handle packaging and trimming, and they don't have a union behind them.

CannaCraft has been part of the Sonoma County scene for roughly ten years. Back in 2022, it merged with March and Ash, a retail chain out of Southern California.

The bigger problem: California keeps shrinking

These cuts didn't come out of nowhere. California's legal market has been sliding for a while now, even though the state's top cannabis regulator keeps insisting billion-dollar growth is still on the table.

Look at the sales numbers and the trend is hard to miss. Licensed retailers pulled in $3.9 billion in 2025. That's down from $4.2 billion in 2024. Go back one more year and it was $4.4 billion in 2023. So this is three straight years of decline in the biggest legal market in the country.

Local governments are starting to feel the heat. In April, Sonoma County's Board of Supervisors approved a tax break that drops the cannabis business rate to $0 for operators who qualify in fiscal 2026-27. The board also rolled out a new annual licensing system, with fees that start above $500, to help fund the county's cannabis program.

The trouble isn't only in California, either. The Cannabist Co., a multistate operator, is shutting down cultivation in both Colorado and New Jersey. And the labor picture reflects it nationally. The legal U.S. cannabis industry employed 412,500 people in early 2026. That's a 2.7% drop from the 425,002 jobs it reported a year earlier, according to the 2026 U.S. Cannabis Jobs Report from Vangst and Whitney Economics.

This article is based on reporting by Margaret Jackson for MJBizDaily, with additional details first reported by The Santa Rosa Press Democrat. Read the original coverage at mjbizdaily.com.

Our take

Let's call this what it is. California's legal weed market was oversold, and now the people who built it are paying for that fantasy with their jobs. The regulators keep promising a billion dollars in new growth while sales fall for the third year running. Those two things can't both be true. When a CEO says his company "was sized to a scale of industry that didn't materialize," he's describing every operator who believed the green rush hype and staffed up for a market that never showed. And notice the quiet part. His explanation for the cuts is that competitors now "do more with less space." That's a polite way of saying automation and consolidation are squeezing human workers out of the picture. What this means is the trimmers and packagers at NorCal have no union to soften the landing.

Sonoma County slashing its cannabis tax to zero should tell you everything. Local governments only give money back when they're scared the whole thing is collapsing. This isn't a rough patch that a good quarter fixes. High taxes, an illicit market the state never got under control, and years of overbuilding have baked this in. If you operate in California, treat this as a warning, not a headline. The shakeout isn't close to over. We believe the manufacturing tier is going to keep getting leaner and more consolidated. The businesses that survive will be the ones who planned for a smaller, meaner market instead of the one everyone was promised.