Why weed companies can't make any money

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High taxes, siloed state markets and lack of access to capital make it very difficult to turn a profit in the cannabis business

Arguably the biggest barrier to making money is the sky-high taxes weed companies pay because they’re treated like illegal narcotics traffickers under the federal tax code. The goods also cannot cross state lines, and that lack of interstate commerce means companies must build separate

“If you’re able to generate cash flow with all of these headwinds, when these headwinds start to be removed it’s going to be an incredibly, incredibly good business model,” said Jen Drake, co-chief operating officer of Ayr Wellness, which has retail and cultivation operations in eight states, including Florida, New Jersey and Pennsylvania.spent heavily last year to expand capacity

The end result is that weed companies are in a deep financial funk. Capital raises are down more than 60 percent compared to 2021, according to Viridian Capital Advisors, a financial analysis firm that tracks the cannabis industry.

and raise capital. Those restrictions mean firms in the sector must typically pay far higher interest rates than those in other industries.initially passed the House in September 2019 with strong bipartisan support, and has since cleared the chamber six more times as either a standalone bill or as part of a broader legislative package.

Even if something akin to federal legalization were to happen, the industry is split on whether they want state borders to vanish when it comes to cannabis production and sales. | Jose Luis Magana/AP Photo “One of the hardest things about doing business in a business that’s federally illegal is the difficulty of dealing with the state-by-state regulations,” said Drake, of Ayr Wellness. “If I could wave my magic wand and make one thing easier and smoother, it would be the state-by-state regulatory process.”Despite the current financial woes besetting the cannabis industry, most close market watchers remain giddily optimistic about the future.

 

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Lol they are raking in the money. Please.

Lower the price.

It needs to be decriminalized Federally. The laws are based on false classification, making them without merit. Should have been changed decades ago.

34 MARIJUANA RELEGALIZATION REASONS Speech: 'The United States of America Should Relegalize Marijuana' THE ROBERT WILLIAM ABREVAYA SHOW 21 (2nd part) 52:07 RealRobert William Abrevaya Facebook 8/27/22 Relegalize Marijuana Cannabis

Low pay can't afford to buy it also is a issue. Small towns are small for a reason make nothing have nothing!

And yet for everything this administration is doing it keeps sidestepping cannabis! Can someone please explain why?!?!?!? They were heavy on pandering about this during the campaign especially the VP!

Not to mention it’s easy to buy on the streets. If dispensaries sell it cheap bc of glut then that will be bought marked up and sold illegally.

Perhaps Biden should spend another trillion to save the canabis business. Give them a “loan” and then just forgive that loan.

You mean people selling illegal products are finding it hard to turn a profit. Seems like we are doing it right.

Grow in Oklahoma, sell in Texas. Problem solved.

Really? Tell that to the consumers.

Legalize marijuana across the country. It’s just unbelievable, I mean it’s 2022 ?

you take all the risk, you do all the work, we'll do nothing and take our 30%. a good deal if you can get it.

The states r making a killing

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