MAKING IT BIG
Being successful in legal cannabis isn’t easy
California began its social equity program for cannabis businesses in 2017, hoping to support those targeted by prohibition to make their way in the legal market, but it hasn’t been an easy road, reports BBC.
California’s social equity programme gave support to Black and Hispanic Americans who had been unfairly targeted. The BBC spoke to these license holders, finding that the transition from legacy still isn’t easy. One business owner shared the issue of constant thefts from his store, losing thousands of dollars. Others spoke about the drop in revenue from their legacy operations as well as access to capital, banking difficulties, bureaucracy, and the high tax on legally sold cannabis.
“We are being overtaxed and over regulated, tax takes up most of my money,” license holder, Tucky Blunt, complained, “I’m not going to be in business just to stay in debt. I want to make generational wealth for my kid’s kids, I can’t do that if I’m going into debt every year.”
Falling cannabis prices are a threat to the cannabis industry
Retail and wholesale cannabis prices are continuing to fall as legacy competition and consumer purchasing habits change, reports Bloomberg.
In Q3 of 2022, the cost per gram has dropped 13% on the year previous, the biggest drop in cannabis price recorded in a 12 month period. Data from BDSA shows that wholesalers have been hit even harder. Covid sales numbers gave the industry optimism but it meant cultivators who foresaw the trend continuing have now created an oversupplied market.
“The industry today is facing a number of headwinds. The most existential is pricing,” said Rick Maturo, BDSA.
10 YEARS ON
Washington sees first ever drop in cannabis sales year on year
Washington state legalized adult-use 10 years ago this month and for the first time they are recording a drop in sales from the year before, reports Seattle Times.
Sales have grown year on year, growing from about $180 million in 2015 to over $1.3 billion as of July 2022, with the state collecting $509 million in excise tax in 2022. The dip seen this year seems more to do with the spike in 2021 as pandemic spending habits were still in swing. 2022’s sales revenue may have dropped but is still higher than 2020.
“What you’re seeing as a ‘dip’ is really sales returning to normal growth as more people returned to in-person work,” said Brian Smith, spokesperson for the Washington State Liquor and Cannabis Board.