California’s Cannabis Market: ‘A Recipe for Disaster’

California’s Cannabis Market: ‘A Recipe for Disaster’

<![CDATA[Cannabis sales in California are on the rise, but the state’s regulated industry continues to struggle.But if it’s not sales numbers holding back licensed operators from thriving, then what is?According to Jocelyn Sheltraw, Director of Industry Relations for Headset, a provider of cannabis data and marketing solutions, the biggest hurdles for California’s licensed cannabis businesses are:an imbalance between supply and demand, wholesale price compression, a declining market share for flower, high taxes and a still-thriving illicit market.“It’s just a recipe for disaster,” Sheltraw tells Cannabis Business Times. “It’s just created turmoil on the cultivation side.”RELATED: ‘Surviving is Thriving’ in California’s Cannabis MarketSheltraw, who also serves on the board of directors for the California Cannabis Industry Association (CCIA), says that, overall, legal cannabis sales in the state have continued to grow.Images courtesy of HeadsetFrom February 2021 to February 2022, for example, Sheltraw says the market saw 7% growth, although on a month-over-month basis over the last 12 months, sales figures are beginning to return to where they were prior to the COVID-19 pandemic.For example, Sheltraw says that in April 2021, monthly cannabis sales in California were just over $475 million. Then, in February 2022, sales dipped to $402 million for the month.“You can see that even though as a market, we’re growing—this is a higher sales percentage than we saw last year or higher monthly sales than we saw last year—we’re starting to see sales that are just declining in the market,” Sheltraw says. “We’re seeing sales retracting to pre-COVID levels. We’re seeing a sales decline month over month.”For California’s licensed cannabis cultivators, there are much more complex issues at play. While sales in the regulated market continue to grow, Sheltraw says this growth isn’t necessarily translating to individual licensed cannabis businesses due to a variety of factors.One of these, she says,…

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Source : California’s Cannabis Market: ‘A Recipe for Disaster’

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