The Marijuana Market Has Seen a Decline in Sales Since the Outbreak.!

Marijuana industry sales slow down after pandemic surge

After a sales boom during the pandemic, the U.S. cannabis industry is starting to slow down as it faces economic and regulatory problems and people choose to spend their money elsewhere.

A report from cannabis data firm Headset says that sales at retail stores and dispensaries have gone down from a year ago in states like Oregon and Washington where marijuana markets are already well-established. In one of the most established markets in the country, Colorado, sales were 11.4% lower in June than they were a year earlier.

Chris Wash, CEO of Marijuana Business Daily, said, “We saw a huge increase in sales in 2020 because of the pandemic. People stayed home, got money from the government, and didn’t have much to do.”

Headset says that between March 2020 and March 2021, sales in Colorado were up 25.8% on average each month compared to the same time last year. The report found that as the pandemic started to get better last summer, both the number of times people bought marijuana and the amount of money they spent started to go down.

Marijuana industry sales slow down after pandemic surge

In July, for example, people spent $55.21 on average at the average Colorado store when they went there. Headset research says that was about $4 less than the average of $59.73 in July 2021.

“Retailers are discounting in a time of high inflation because they want to move product off the shelves,” said Wash. He also said that businesses face tough competition from a “thriving” illegal market that isn’t taxed.

Troy Datcher, CEO of The Parent Company, a cannabis company in California, said, “We work in a very difficult and competitive environment. Our biggest competitor is the black market.”

Overall retail sales are still going up and are expected to keep going up as new big markets open up, such as New York, Maryland, and Missouri.

A report from Marijuana Business Daily says that sales of medical and recreational cannabis in the U.S. could reach $33 billion by the end of the year, up from $27 billion last year. By 2026, sales should have reached $52.6 billion.

Wash Said, “the Future Looks Very Good in The Long Run.” “This Is Just What Goes on In Business.”

For now, though, there is less money to invest because the market is getting more crowded.

A cannabis advisory firm in New York called Viridian Capital Advisors says that the total amount of capital raised for marijuana in the U.S. so far this year is down 62.6% from the same time last year, and equity financing is down 96.3%, from $2.1 billion a year ago to $78 million now.

Experts say that part of the problem is that investors are tired of waiting for the government to make rules.

Read More: Legislators in Ohio Hear Testimony on A Bill to Legalize Recreational Marijuana Use.!

Because there are no federal rules, cannabis businesses in states where recreational sales are legal still can’t use traditional banking services or get money from institutions. The Secure and Fair Enforcement Banking Act, or SAFE, would get rid of these restrictions, but it hasn’t passed the Senate yet, even though it has passed the House several times.

“A lot of investors jumped in thinking that the federal government would either reschedule the drug or pass some kind of banking law,” said Matt Hawkins, who started the cannabis investment firm Entourage Effect Capital.

Hawkins said that he and other investors have become more picky about the businesses they fund, giving priority to those that already have a big share of the market. He said that could hurt smaller players who are trying to get a foothold.

Marijuana industry sales slow down after pandemic surge

Read More: Why Marijuana Users in Missouri Will Still Require a Card to Purchase Dec 8.!

Robert Beasley, CEO of Fluent, which runs medical dispensaries in Florida, Pennsylvania, and Texas, said, “The industry is still in a state of internal consolidation, and it’s hard for new licensees to get capital and grow in a way that makes sense.”

Beasley said that he is hopeful that “a few small measures of regulatory relief” will help get the industry back on track, even though the economy is not doing well.

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