Some marijuana multistate operators have weathered the perfect storm of macroeconomic headwinds, cannabis-specific challenges and legislative disappointments better than others, as evidenced by full-year and fourth-quarter results reported this spring.
Analysts and cannabis industry executives said they underestimated the impact of a multitude of challenges in the fourth quarter, which included:
Inflation driving up the cost of operations, many of which are business expenses that don’t qualify for tax breaks because of Section 280E of the federal tax code. Inflation driving down consumer spending in many state markets, causing some shoppers to forgo premium products in favor of less expensive value brands. Soaring interest rates, which increased the cost of raising capital. Falling wholesale cannabis prices driven by glutted markets. Lack of progress on banking reform or other key efforts at the federal level.
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While most of those factors aren’t expected to shift any
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