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Is the U.S. Cannabis Industry Collapsing? – Cannabis | Weed | Marijuana

Published

11 months ago

June 23, 2023

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Is the U.S. cannabis industry collapsing? A new report from Whitney Economics answers yes. While the Biden administration kicks the rescheduling of cannabis down the road for the 2024 election, only 24% of U.S. cannabis businesses are profitable.

Whitney Economics is a consulting and research firm that compiles cannabis economic data into annual reports. They published their findings in their second annual Cannabis Operator Sentiment and Business Conditions.

U.S. Cannabis is Collapsing

According to the survey report, yes, it appears the U.S. cannabis industry is collapsing. Only 24.4% of cannabis operators in the U.S. are profitable. This is down 42% from the year before.

Little-to-no access to banking, rising supply chain costs, and lower cannabis prices all contribute to this collapse. The report suggests at least seven quarters of below-average growth.

But is the U.S. cannabis industry collapsing beyond repair? That depends on what state you find yourself in.

The report found that government regulators determine if you succeed or fail. Rules and requirements that are too burdensome and capital-intensive negatively affect cannabis businesses.

The report highlights that markets and business conditions have changed, but regulators’ policies have not.

However, instead of moving toward freer markets, 70% of the respondents want regulators to cap licences. While this would limit competition and thus make the existing operators profitable, it does so at the expense of consumer choice.

According to the report, U.S. cannabis is collapsing because legislatures and regulatory policies focus on generating tax revenue instead of creating a viable and sustainable cannabis industry.

“Operators continue to be impacted by taxes, strict regulatory rules, and lack of access to capital. Only one quarter (24.4%) of respondents reported profitable operations.”

Whitney Economics Q4’22 Cannabis Operator Sentiment & Business Conditions Survey Report

3 Ways to Reverse the U.S. Cannabis Industry Collapse

If the U.S. cannabis industry collapses, how can we reverse it?

The Whitney Economics report cites taxes, regulations and lack of capital as the three major obstacles negatively impacting the industry. While conventional wisdom may suggest tweaks here and there, we recommend a more radical approach.

After all, if a report said the American dairy industry or the automobile industry collapsed by 42% in one year, the President would be on TV declaring a national emergency.

But cannabis? Crickets.

Fortunately, the solutions we present here would benefit all industries if implemented. Not just cannabis.

1. Taxes

Cut taxes across the board and gut entire categories. States charge an “excise tax” on cannabis. Another name for excise taxes is sin taxes because that’s essentially the idea.

Some actions are morally wrong but legally permissible. Ergo, the government charges an additional “excise” tax.

But this idea is incompatible with individual liberty. As well, who decides what is moral and immoral? We’re not talking about hiring hitmen on the dark web. We’re talking about a benign, nontoxic herb.

Millions use it for medicinal purposes. Almost everyone uses it for therapeutic purposes; otherwise, why consume it?

Cutting taxes would help all businesses, not just the collapsing U.S. cannabis industry. As well, lower taxes means less money going into government coffers. And that’s always a good thing.

2. Regulatory Rules

A market economy without regulation is impossible. The question is: who is doing the regulating?

Entrepreneurs regulate each other by competing for consumers. Consumers regulate entrepreneurs by patronizing different competitors.

The only way to profit – absent government privileges – is by exchanging goods and services with people.

But not every business owner is honest. Some will cut corners at others’ expense. And disputes will inevitably arise. That’s the argument for regulation.

But these large government regulatory bureaucracies are an invention of the 20th century.

Before, Western civilization relied on English common law. For centuries we’ve developed rules and regulations from actual cases and settlements.

Politicians didn’t preemptively create new rules and then empower expensive bureaucracies to enforce them.

In this way, regulations were procedural and adapted to change. A common law legal system complements free markets. A government-regulated market creates the conditions for regulatory capture and, in effect, economic fascism.

3. Access to Capital

Would the U.S. cannabis industry collapse if government regulators didn’t make arbitrary demands based on their definitions of “public health and safety?”

Possibly, but access to capital goes beyond the regulatory structure.

For over a century, the Federal Reserve has been dedicated to transferring capital from the middle class to the richest of the rich.

The Fed creates asset price bubbles by manipulating the money supply and interest rates. This benefits the wealthy who own assets and harms individuals on low and fixed incomes.

When the bubbles burst, as seen in 2008, the subsequent economic recession disproportionately affects the middle and lower classes. Meanwhile, the big banks (who cause the problem) get a taxpayer-funded bailout.

Americans can end this over-a-century-long con job by ending the Fed and legalizing private, competitive currencies. And thereby reversing the collapsing U.S. cannabis industry.

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“A big deal”: What the feds’ move to reclassify marijuana means for Colorado cannabis

Published

1 week ago

May 1, 2024

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Cannabis advocates in Colorado cheered the Biden Administration’s reported move to reclassify marijuana and said the decision likely would reduce businesses’ tax burden significantly.

Industry leaders cautioned that such a move — if finalized — would not resolve some major challenges facing the industry, such as limited access to banking. But they pointed to the symbolic importance of preparations by the U.S. Drug Enforcement Administration to downgrade the substance’s drug classification.

A man pours cannabis into rolling papers as he prepares to roll a joint the Mile High 420 Festival in Civic Center Park in Denver, April 20, 2024. (Photo by Kevin Mohatt/Special to The Denver Post)

Read the rest of this story on DenverPost.com.

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business

Astronauts to Test Cannabis Growth in Outer Space

Published

1 month ago

April 1, 2024

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NASA‘s recent collaboration with the International Space Research Consortium to launch a mission testing the cultivation of cannabis in the microgravity of space has stirred a whirlwind of interest and controversy across the globe. This initiative aims to unravel the mysteries of how low-gravity environments affect plant growth, with cannabis serving as the pioneering subject. According to Dr. Alfred Terra, the esteemed lead scientist spearheading the project, the conditions in space present an “unparalleled opportunity” to push the boundaries of our understanding of botany and its applications in medicine and agriculture beyond Earth’s confines.

This ambitious endeavor aims to shed light on the potential for utilizing space-based agriculture to support long-duration space missions and future colonization efforts on other planets. The choice of cannabis as a research subject is particularly intriguing due to its complex biochemical makeup and its increasing use in medicinal therapies on Earth. Insights gained from how cannabis adapts to space’s harsh environment could lead to breakthroughs in growing food and medicinal plants in extraterrestrial colonies.

Despite the scientific excitement surrounding the mission, the announcement has been met with its share of skepticism and criticism. Some members of the scientific community and the general public question the allocation of resources toward cannabis research in space, arguing that more pressing scientific and exploratory questions merit attention aboard the International Space Station (ISS). These critics call for a focus on projects that directly contribute to our understanding of space travel’s impacts on human physiology or further our knowledge of the cosmos.

However, the space agencies involved have been quick to highlight the broader implications of this research. They argue that studying cannabis growth in microgravity could offer invaluable insights into plant biology, stress responses, and the possibility of cultivating a variety of crops in space, which are crucial for the long-term sustainability of space exploration and eventual human settlement on other planetary bodies.

Amidst the debates over the mission’s merits and the speculation spurred by its announcement date—April 1st—lies a deeper curiosity about the future of space exploration and the role of innovative agricultural research in that journey. The timing has led some to question the announcement’s authenticity, pondering whether it could be an elaborate April Fool’s Day jest aimed at sparking discussion or simply a coincidence that has amplified the public’s fascination with the project.

Whether viewed as a bold step into the future of space agriculture or a controversial choice of research focus, the mission symbolizes a growing intersection between space exploration and the quest to understand and utilize biological processes in unprecedented environments. As the launch date approaches and preparations continue, the world watches, eager to see what insights this venture might unfold about cannabis, plant science, and the potential for life beyond Earth.

*** This article is an April Fool’s Day joke ***

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business

A Hiring Wave on the Horizon

Published

2 months ago

March 1, 2024

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The U.S. cannabis industry is on the brink of a significant hiring wave in 2024, spurred by a 12% increase in legal sales in 2023, reaching $29 billion. This growth, alongside potential federal reclassification of cannabis, is expected to create up to 100,000 new jobs, particularly in the retail sector, where 93% of companies plan to expand their workforce. The Vangst 2024 Cannabis Salary Guide highlights an industry ready to bounce back from previous economic stagnation, with a strong emphasis on experience, adaptability, and cultural fit in prospective employees.

The cannabis sector is poised for a massive expansion in employment opportunities in 2024, following a year of economic challenges and layoffs. This optimistic forecast comes from Vangst’s latest industry salary guide, which anticipates a hiring boom driven by increased legal cannabis sales and the potential for federal rescheduling. The anticipated move to reclassify cannabis to Schedule III could significantly reduce tax burdens, increase company valuations, and attract more investors, according to Viridian Capital Advisors.

Retail cannabis companies are at the forefront of this hiring surge, with nearly all surveyed indicating plans to bolster their teams in response to growing demand and market expansion. The focus is not just on filling positions but on finding candidates who can navigate the evolving legal and market landscape, prioritize cultural fit, and possess strong communication skills over traditional qualifications.

Salaries in the cannabis industry have also seen an uptick, with top-end wages growing by 4.7%, outpacing the national non-cannabis average. However, the sector still trails behind others in offering comprehensive benefits packages, a gap that affects employee satisfaction and retention. The demand for health insurance and better work-life balance is clear among job seekers in the cannabis space.

Diversity and inclusion are gaining traction within cannabis company hiring practices, with a significant portion of companies implementing strategies to create a more inclusive workforce. The industry’s employment of veterans and individuals with disabilities highlights its diverse nature, but there remains room for improvement.

Why It Matters: This hiring wave marks a pivotal moment for the cannabis industry, signaling a shift towards recovery and growth after a period of stagnation. It underscores the industry’s resilience and its potential to contribute significantly to the economy through job creation and increased sales.

Potential Implications: The anticipated hiring boom in the cannabis industry could lead to wider acceptance and normalization of cannabis use, further influencing policy changes and societal attitudes. Additionally, the focus on diversity and inclusion could set a precedent for other sectors, promoting a more inclusive workforce across industries.

Source: Green Market Report

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