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10 years after legalization, Washington state cannabis growers face headwinds

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Washington state residents voted to legalize adult-use cannabis 10 years ago this month, and in that time, the market has been a success – but not for everyone, and the challenges have been substantial.

As the state’s recreational marijuana industry has grown and matured over the past decade, some of the primary issues today include:

A lack of access to capital. The state’s residency requirements hinder outside investment. Low wholesale prices. Craft and small cultivators confront an oversupplied flower market. Limited social equity opportunities for minority cannabis entrepreneurs.

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But even with those challenges, that’s not to say the market as a whole hasn’t done what it was intended to do, which was to create a state-licensed economy for legal marijuana companies.

The 2022 MJBiz Factbook estimates adult-use sales in Washington state retail stores this year at $1.5 billion-$1.7 billion and reaching $2.3 billion-$2.5 billion

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Marijuana Business Daily

Ontario cannabis store regulator under pressure over alleged ‘pay-to-play’ deals

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(This is the second in a series of stories exploring pay-to-play schemes in Canada’s cannabis industry. The first installment can be found here.)

Ontario’s cannabis store regulator is facing calls to crack down on alleged pay-to-play schemes that some industry executives say allow larger marijuana producers and brands to secure shelf space for their products and other special treatment from retailers.

Industry executives say the problem ballooned earlier this year after the Alcohol and Gaming Commission of Ontario (AGCO) attempted to clarify its rules on inducements or “slotting fees” by issuing an update to the Registrar’s Standards for Cannabis Retail Stores – the rules governing legal marijuana stores.

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Jennawae McLean, co-founder and CEO of Calyx + Trichomes in Kingston, said pay-to-play is common in many industries, “but they’re straight up not allowed in Ontario, and I don’t understand why the AGCO and other provinces

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Cannabis company Item 9 Labs cutting staff by 20%

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Vertically integrated cannabis producer and retailer Item 9 Labs Corp. is cutting its staff by 20% as part of a push for profitability.

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Item 9 had 103 full-time employees and two part-time employees as of January of this year, according to a regulatory filing.

The cutbacks announced Thursday morning by the Arizona-based company come as it works to acquire Canadian cannabis retail franchisor Sessions Cannabis, adding to its Unity Rd. retail franchise portfolio in the U.S.

In a statement, Item 9 said it has been working “to reduce operating expenses, while increasing gross margin on its Item 9 Labs branded products.”

The company said the staff reductions are meant to “(reduce) many redundancies and better (position) the company to become profitable while maintaining scalability.”

The company also said it implemented other cost-saving measures to reduce overhead expenses by at least 15 percent.

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Ontario cannabis execs sound alarm over alleged pay-to-play retail scheme

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(This is the first in a series of stories exploring pay-to-play schemes in Canada’s cannabis industry.)

Canadian cannabis producers and brands increasingly are, in effect, paying Ontario retailers for shelf space and other special treatment for their products, according to industry executives.

These executives allege the effective use of so-called slotting fees threatens the survival of hundreds of independently owned retailers and craft cultivators, who lack the money and resources to finance such pay-to-play schemes.

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The monthly fee can amount to tens of thousands of dollars or more, according to one industry source who declined to be identified for competitive reasons.

Slotting fees, common for decades in traditional retail, are a relatively new phenomenon in cannabis in both the United States and Canada.

In Ontario, regulators prohibit producers and brands from paying retailers for favorable “material” treatment.

In June, the province’s retail regulatory agency noted that

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