As mainstream businesses cope with surging inflation and the imminent threat of a recession, many adult-use marijuana companies – growers, retailers, and ancillary businesses alike – struggle to adjust to the economy with their own problems.
Falling prices and a product glut in more established state marijuana markets are forcing companies out of business, triggering layoffs and setting off an industrywide scramble to stay afloat.
Colorado, Oregon, and Washington state are among the more mature markets where wholesale cannabis prices have tumbled because growers produced far more flower than retailers could absorb.
This inflation of flower compared to retailers selling the product has led to falling prices, with the limit on marijuana business licenses being a contributing factor.
Compounding the problems of cannabis companies: Marijuana products are often taxed at a far higher rate than mainstream goods such as corn, milk, and automobiles.
In Washington state, for example, taxes can account for nearly 50% of the price of marijuana products on store shelves, making it harder for owners to remain competitive – much less survive.
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