WTF

The cannabis market is a mess, but more people than ever are lighting up, yet nobody is profitable, brands are failing, farms are struggling, and margins are getting slimmer (oversupply), yet demand is expanding. The system has been a disaster from the get-go because of the regulations and taxes. It makes no sense, and recreational cannabis is legal in twenty-four states, and thirty-eight states for medical cannabis. That means everyone is using.

Here are some stats I read last week. 42% of adults in the US used cannabis in 2023. The industry is expected to reach nearly $80 billion by 2030. These numbers don’t include the hemp industry, which is minimally regulated compared to the cannabis industry. Those drinks that have penetrated the market through your local deli are taking away sales from the legal cannabis industry that is attempting to grow. It is an easy way in. Gotham has incredible drinks from NYS farms that have THC/CBD in them, which are highly regulated, and those hemp drinks are taking sales away from us.

I spoke on a panel at the Business of Cannabis week—all of this information that I wrote about above is well-known in the industry. Everybody is looking at the numbers and figuring out how to succeed in their own way—riding the wave until something changes. The capital being poured into every segment of the industry is astounding, and it doesn’t take much to see the numbers of the big multi-state operators that trade on the Canadian stock market to see that we are all losing money. Many investors have bailed, and new ones come in hoping that they will catch the wave that we are all waiting for.

I believe the only way to achieve success in this industry, that is so obvious a new economy of income/taxes for the states, is to deschedule cannabis and federally legalize the plant. The other is to determine how to punish illegal operators effectively. Sending them to jail is ridiculous; fining them and making their lives so difficult to operate will eventually push them out, but do something. Jail is rarely the answer, and in this industry, too many have already been touched by the absurd war on cannabis.

If that happens, and our stores are the only place to shop or order delivery from, we can then monitor the origin of the products, and each brand will be able to build its market without competing with the illegal market. Every farm will know what it needs to grow, and dispensaries will cultivate their own communities and patrons for the many fans of the plant.

The government needs to pay attention to the businesses of cannabis through the lens of safety, taxes, jobs, and growth, and that is not what they are doing today.