Cultivators in Established Markets to Regulators: “Stop Licensing New Businesses”
- Nov 2, 2022
In some of the more mature markets (such as Colorado, Michigan and Oregon), cultivators and asking regulators and lawmakers to stop issuing new cultivation licenses. Those states are experiencing falling flower prices and have a large amount of inventory already on hand.
Oregon has already taken steps to limit the issuance of new licenses. Oregon will not approve any new licenses submitted after January 1, 2022, until March 31, 2024, when licensing will open again. Oregon already has issued 1,407 producers licenses and 826 retailer licenses.
Michigan has already experienced significant depression in the price of flower, and should continue to see prices falling after the October outdoor harvest -- especially with more and more cultivators continuing to build out their current facilities.
Colorado actually experienced a decline in sales in August 2022 of 2.2% due to a number of factors. One is the legalization in Arizona and New Mexico, nearby states, which means Colorado is no longer the only place people can buy legal cannabis. For Colorado, August was the 8th consecutive month where sales were flat or down.
These states were early legalizers. As more and more states look to legalize adult use cannabis, and with midterm elections around the corner, will the later legalizers learn from the mistakes of the earlier? Only time will tell.
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Eric Altstadter CPA is an Audit Partner and Chair of the firm's Cannabis and Hemp practice with over 30 years of experience working with public companies and privately held businesses
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