The legal cannabis trade, still in its infancy, is flailing in many parts of the country as the pandemic boom that sent sales soaring has tapered off. Supply is now flooding the market in several states, economists say, depressing prices and decimating already-thin margins. And competition is sure to escalate as decriminalization spreads, large growersadopt more cost-effective technologies and the illegal market not only endures, but thrives.
The turmoil is mostly lost on consumers because weed is the rare commodity untouched by the pervasively high inflation blanketing most other goods and services. In fact, retail prices have fallen 10 percent this year in California, the nation’s largest market. It also compounds the challenges unique to this industry: Because marijuana remains illegal federally, businesses must navigate a labyrinth of overlapping regulations — creating confusion and occasionally chaos.
Essentially unable to raise prices,many cultivators and vendors are slashing them in hopes of generating any cash at all. By many accounts, the industry is struggling against unprecedented uncertainty and poised for what Keats is calling the “Great Reset.”
“It’s the worst it’s ever been,” said Tamara Kislak, owner of That Good Good Farm, a small cannabis cultivatorin Mendocino County, who has worked in the industry for two decades.
“We went into this year fully knowing that we weren’t going to make money.”
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