The takeaways from Washington’s ‘first-ever economic analysis’
From job creation to taxation, Washington’s CannaBusiness Association and High Peak Strategy conducted the first economic analysis of the cannabis industry for the nine years it’s been legal in Washington State, reports MJBizDaily.
- The industry created 18,360 jobs over the nine-year period
- Generated $876.5 million in income
- Generated $2.6 billion in revenue
- In 2020, there were 1,600 cannabis businesses and 2,795 licenses
- Revenues grew by 23% from 2015 to 2020
Washington’s 37% excise tax rate on adult-use cannabis is the highest in the US. Combined with sales taxes, it’s a whopping 46.2% — which could send price-conscious shoppers to the illicit market.
“While Washington was a first-mover in the legalization of recreational cannabis, in the view of many businesses interviewed for this study, it has since fallen behind other states in areas of regulation and taxes to support the statewide industry,” wrote High Peak founder and principal Spencer Cohen.
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TOUGH TIMES CONTINUE
Supply-chain backlog hits California cannabis
California’s embattled industry is facing yet another challenge: supply chain “gridlock,” according to MJBizDaily.
There are a few Covid-related issues creating the backlog:
- Labour disruptions
- Shipping and delivery delays
- Rising prices on materials and services
Las Vegas preroll company Hara Supply reports that shipping container costs from India have jumped by 733%, from $3000 to $25,000.
“The logistics crunch and rising costs, no doubt, are affecting cannabis operators from coast to coast, but nowhere is the effect more immediate than in California: More than 40% of the nation’s maritime imports pass through the adjoining ports of Los Angeles and Long Beach alone,” reads the piece.
LAND OF LINCOLN
Illinois cannabis sales doubled last year
It’s only been legal in Illinois for two years, but adult-use cannabis sales doubled to $1.3 billion in 2021, reports FOX. Sales reached $670 million in 2020.
Follow the money
- 25% of the cannabis sales tax goes to a program designed to right the wrongs of the war on drugs
- Local governments also receive a portion, with some reserved to fund crime prevention strategies
UK’s Metro Bank shuts its doors to cannabis businesses
One of the only banking institutions willing to work with the UK’s burgeoning CBD industry is now closing cannabis-related business accounts, reports BusinessCann. According to clients of the Metro Bank, they received notice in December that it is closing “every account that’s in any way connected to the CBD sector.”
The bank declined to comment, but said it has the right to “suspend, stop or reduce a service, facility or account” to account holders who don’t adhere to its terms of service. But what the breach is or how it relates to cannabis is unclear at this time. Worse, the problem is all-too-familiar: the UK’s Revolut and Wise financial institutions have recently closed cannabis accounts, and both the Canadian and US industries have grappled with similar challenges.
“I think banks are still trying to understand the industry, there’s still this lack of clarity of their treatment of cannabis, and understanding of the legal position towards cannabis,” said Prohibition Partners CEO Stephen Murphy.