Why it matters: The majority of cannabis cultivators have a negative outlook on the current state of the industry, according to a survey from Wells Fargo. Falling prices, restrictive regulations, and lack of distribution avenues were cited as the main sources of stress for cultivators. California, the largest cannabis market in the world, had the most negative outlook, largely due to falling wholesale prices.
What they are saying: 58% of surveyed growers expressed feeling “bad” or “terrible” about the current cannabis market. Only 9% said they feel “good” and 2% said they feel “great” about the market. Falling prices were a major concern for all cultivators, with the majority reporting selling wholesale flower at or below the average breakeven price.
The big picture: The negative sentiment among cultivators reflects the challenges and obstacles facing the cannabis industry, including oversupply, falling prices, and stringent regulations. The survey highlights the need for the industry to address these issues in order to create a more stable and sustainable market.
What to watch: It will be important to track how the industry adapts to the challenges identified in the survey. Cultivators’ persistent investment in optimizing production while keeping costs low could help mitigate some of the financial struggles they face. Additionally, monitoring any shifts in regulations or distribution avenues could impact the outlook for cultivators.
My take: The findings of this survey underscore the difficulties faced by cannabis cultivators, particularly in a rapidly evolving and competitive industry. It is crucial for stakeholders to address the challenges identified in order to support the growth and stability of the cannabis market.
