A new report from Wells Fargo has revealed that 58% of cannabis cultivators in the US feel “bad” or “terrible” about the market. This compares to 11% that feel “good” or “great”.
The US cannabis market exploded during the COVID-19 pandemic but has since seen slower growth in 2023.
Wells Fargo’s report – Cannabis Cultivator Survey Edition 3 – carried out in collaboration with Cannabiz Media, surveyed over 400 growers in eight US states, who expressed negative sentiments about the current state of the market.
The report showed that 66% of California cultivators felt “bad” or “terrible” compared other markets at 55%, with declining wholesale prices cited as the main frustration, followed by burdensome regulations and a lack of distribution.
A total of 87% of cultivators are now selling wholesale flower for $1,250/lb or below, demonstrating that pricing is still declining.
Additionally, despite oversupply issues potentially lingering, only 19% of cultivators indicated plans to partially or fully exit the industry, and only 13% had plans to decrease cultivation over the next 12 months.
Wells Fargo stated: “Cultivators appear willing to ride out the storm, although this could prolong market difficulties and push out any recovery, in our view.”
One Washington cultivator commented: “Our state just makes it very hard to do business. It’s overregulated. It’s oversupplied right now also because they’ve issued too many licences to grow. I believe the demand is still there.”
“It’s a little bit saturated and I think Colorado in particular does a lot of excessive regulation that in the end doesn’t really benefit the state or the business,” added a Colorado cultivator.
“Yeh, it’s been rocky recently. It’s getting better, but things are definitely manageable.”