While a cannabis oversupply in Massachusetts has allowed customers to enjoy lower prices for marijuana products, it is leaving many businesses with questions of viability While that is a short-term win for users, it's bad news over the long term for businesses.
The trouble is on two fronts: The wholesale value of the crop is greatly diminished, and at the retail level, businesses must sell about twice as many units to equal the revenue they were bringing in just a short time ago. "You're going to see some natural attrition happen within the marketplace," said Trent Woloveck, chief strategy director at Jushi — parent company of Nature's Remedy in Massachusetts.Sign up for NECN newsletters.
Multiple business executives in the industry tell NBC10 Boston an oversupply of product is the main culprit of a falling price. In Massachusetts, a slew of new grow operations, dispensaries and products have exploded onto the scene in a relatively short amount of time. While demand has grown, too — almost $200 million in adult-use sales in the first two months of 2023 — supply is outpacing demand.
Exacerbating the problem for the cannabis industry is a looming April deadline for taxes. Because cannabis operators deal in a product still listed as a Schedule 1 narcotic under federal guidelines, the industry is severely limited on the deductions it can claim with the Internal Revenue Service. That means an oversized tax bill compared to other business types, which puts a further burden on cash flow.
What kind of “joint” are they running? bospoli mapspoli
From a “high” to a low. Talk about a buzz killer for the owners. bospoli maspoli
Good.