A cannabis glut in several states has depressed prices for legal pot, pushing small businesses into turmoil.
It wasn’t alwaysJosh Keats’s job to drive the tractor.
The co-founder of Henry’s Original once had a small crew to farm his 7-plus acres of cannabis from his base in Northern California’s Emerald Triangle. But on this fall day,it’sKeats operating the heavy machinery, trundling down rows ofrich green stalks, because he had to let go two-thirds of his staff to stay afloat.
Yet, he’s grateful. Other weed growers, processors and retailershave had to make more painful cuts — or have folded altogether.“We are witnessing massive insolvency,” Keats said, “especially on the West Coast.”
The legal cannabis trade, still in its infancy, is flailing in many parts of the country as the pandemic boom that sent sales soaring has tapered off. Supply is now flooding the market in several states, economists say, depressing prices and decimating already-thin margins. And competition is sure to escalate as decriminalization spreads, large growersadopt more cost-effective technologies and the illegal market not only endures, but thrives.
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