Voters in Washington state chose to legalize recreational cannabis a decade ago, opening the state up to a multibillion-dollar industry that has seen significant growth in just a few short years. But, even though the adult-use cannabis industry has proven to be quite lucrative with retailers in Washington state selling around $1.5 billion to $1.7 billion worth of cannabis in 2022, the industry is not without its challenges.
A decade after legalizing recreational cannabis sales, Washington’s cannabis industry still faces a myriad of problems that have prevented the space from fully realizing its potential. For starters, there is a crippling lack of access to capital because outside investment has been hindered due to the state’s residency requirements for cannabis retailers.
Additionally, an influx of cultivators in Washington has resulted in an oversupply of cannabis flower and reduced wholesale prices for the plant. There has also been a shortage of social-equity opportunities for entrepreneurs hailing from marginalized communities that were disproportionately affected by the war on drugs.
Despite these challenges, the state’s cannabis industry has achieved the objective outlined in its cannabis legalization bill: to launch a state-legal market for licensed cannabis companies. According to the latest MJBiz Factbook, cannabis sales in the state may reach a whopping $2.3 billion to $2.5 billion by the year 2026.
Verda Bio CEO Jessica Tonani stated during a recent panel that Washington state has come an extremely long way in regard to cannabis reforms and public attitudes.
One of the major challenges in the cannabis industry in states such as Oregon, Washington and Colorado is low wholesale cannabis-flower prices. Attracted by the insane profits players in the cannabis market have been raking in, multitudes of growers have been flooding the market.
Harvests have been particularly good this year, thanks to a robust growing season and limited adverse weather events. Given that the cannabis flower market was already oversupplied, these bountiful harvests saturated the market even further, causing prices to drop even lower.
Cannabis grower Ryan Sevigny said that the cannabis industry is a tough place for farmers at the moment, especially for small craft farmers. Evergreen Market CEO Shannon Vetto is of the same opinion, stating that being a farmer is hard right now and that craft farmers are “hurting the most.”
With the state charging nearly 50% excise, local and state taxes, some consumers are opting to buy from the illicit market to avoid the high prices. In some jurisdictions, the use of indoor cultivation equipment availed by Advanced Container Technologies Inc. (OTC: ACTX) and other such suppliers is reducing how much those people need to spend on dispensary-bought cannabis products.
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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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