Facing an uncertain future, the U.S. cannabis industry is at a crossroads, according to a comprehensive report by Whitney Economics. This annual “feet on the street” survey, conducted among cannabis operators across the nation, has painted a picture of an industry running on fumes amidst a challenging post-pandemic landscape.
Investor retreat, shifting consumer behavior and tight regulatory controls have resulted in an environment far from business-friendly. “Overall, the industry is running on fumes, with little left in the tank. Operators have had to learn how to do more with less,” states the report.
As per the survey’s findings, the short-term outlook for U.S. cannabis operators remains bleak, with improvements projected only by 2025. With already razor-thin margins and regulatory restrictions limiting flexibility, operators are feeling the pinch.
Significantly, the report found that state regulatory structures could significantly impact the success or failure of cannabis operators. Licensing policies and strategies may often clash with public policy objectives, like expanding access for women and minorities and creating opportunities for smaller operators.
The report identified three distinct market stages within the U.S. cannabis industry – mature, recently deployed, and brand-new – each with its own set of challenges and growth potentials. While mature markets like California and Oregon seem to have stalled, newly deployed markets are enjoying better growth due to favorable timing. Brand-new markets, however, are grappling with economic obstacles and sluggish roll-outs of new licenses.
Critical insights from the survey underscore the stark reality of the industry: worsening economic conditions, size-based business disparities and a shift in the market. Yet, amidst these challenges, the report suggests that operators who can streamline their operations, innovate, and remain lean may have a shot at survival.
“Efficiency and rightsizing will lead to success. The operators who can become more efficient, innovative and lean will be better positioned to survive long enough to see a return to less volatile market conditions,” the report noted.
This exhaustive survey conducted by Whitney Economics offers a bird’s eye view of the prevailing conditions in the cannabis industry, serving as an informative resource for stakeholders as they navigate the tumultuous market landscape. You can find the full, free report here.
Image and article originally from www.benzinga.com. Read the original article here.