If we think back a few years to all the “green rush” headlines circulating about cannabis, it’s a little bit hard to wrap your head around where the industry is at today. Unfortunately, today’s cannabis industry is plagued with many struggles amid falling wholesale prices and plummeting sales at legal stores. What’s more, it seems the pain is only beginning, and companies are trying to correct course by cutting costs in anyway possible. Often, that’s at the expense of employees who are laid off or get their salaries reduced, and consumers who are left with cheaply-made, overpriced products available at a decreasing number of retail stores. What’s going on the in the cannabis industry lately?Although legalization is overall a good thing (people getting arrested for cannabis possession is ridiculous, I think we can all agree to that), the bottom line is, the industry is not generating nearly as much revenue as anticipated, and businesses are struggling. Pretty much everyone in the supply chain including cultivators, extractors, dispensary owners, and even those operating ancillary businesses like software and technology are feeling the pain of this stressed market. ![]() But the problem is not demand, people are still buying weed in the same numbers, if not more so, than in years prior. There’s been a huge uptick in middle-aged to older Americans who use cannabis products as well. So it’s not that people are losing interest in weed, although the culture has changed dramatically, it’s because of numerous different elements that make it difficult for weed business to make a profit – mainly taxes and the still-thriving black market. Cannabis businesses are notoriously overtaxed. Then factor in the many other costs and fees associated with operating a weed business, and it translates to higher prices for consumers. Higher than what they would find from a street dealer or unlicensed (black-market) dispensary. And because these unregulated distributors have access to all the same products, sometimes better ones, than legal dispensaries, that makes for an extremely hostile and competitive environment for any trying to operate an above-board cannabis business. The are quite a few other issues with today’s cannabis market, such as oversupply of flower – to the point that growers are having trouble selling off much of their stock, difficulty advertising on prominent search engines and social media sites, problems finding property and real estate for their business endeavors, banking/financing struggles, and the list goes on. In response, big players in the industry are trying to cut costs in any way possible; from mass layoffs and salary cuts, to store closures, and even taking shortcuts on the production side of things. Summarized, the cannabis industry is not faring well at the moment, and these cost-cutting measures are likely to continue well into 2024. Through the first part of the COVID-19 pandemic, people were receiving government assistance and many were working remotely. Sales exploded. This environment fueled additional spending in the cannabis sector, according to Gullickson. Now, consumers are spending less to prepare for a possible recession. Combined with a lack of movement on SAFE Banking or any major federal reform, investors have taken notice. “Capital has gone by the wayside and businesses are having to course-correct,” Gullickson added. “Cannabis market numbers at the end of 2020 and the beginning of 2021 were inflated in many ways and valuations were astronomical.” Mass layoffs and salary cutsLayoffs in the industry are widespread and not limited to any specific areas or sectors. Everyone is getting hit relatively hard. Several large, multistate operators including Curaleaf and Trulieve, as well as many smaller and ancillary companies. Additionally, a growing number of high-profile executives have been leaving the industry. “I don’t think layoffs have peaked. I think this will continue into 2024 for sure,” said Sara Gullickson, CEO and founder at The Cannabis Business Advisors, in an interview with MJBizDaily. Many companies are also resorting to reducing employee salaries in an effort to keep jobs but save money. This is a bit less widespread than the layoffs, but a growing issue, nonetheless. Over the past several months, layoffs and salary cuts have been reported by:
Store and facility closuresNumerous dispensary chains, large and small, are closing their less profitable stores, leaving consumers with less options for legal pot purchases. In September of last year, Canopy Growth announced that it was planning to off many of its retail locations throughout Canada, including stores under the Tweed and Tokyo Smoke brand names. In a letter to shareholders, Zachary George, CEO of Sundial Growers, one of Canada’s largest operators of adult-use cannabis stores, announced a wave of potential closures. He warned the “trickle” of cannabis store closures could grow into a flood “with the toll likely closer to 1,000 than 100. Most retailers are struggling to be profitable, and we are starting to observe a trickle of closures on a weekly basis.” In January, Curaleaf officially stated that they would be closing all of their retail locations in California, Colorado, and Oregon as part of their “continued effort to streamline business operations.” They currently have only one store left in that region, which is on Fremont Street in Portland. All of their California and Colorado dispensaries and cultivation/production facilities have been shut down. In the Midwest, Michigan-based retailer Lume Cannabis closed 4 of its 30 stores in the state. This was shortly after they announced plans to have 100 stores in Michigan by 2025. In Michigan, like many other legal markets, oversaturation is a serious problem that has resulted in substantially lower product prices. The stores that were closed – in Bay City, Cheboygan, Christmas and Southfield – had experienced serious sales declines. Taking shortcutsAside from disposing of employees to save money, many companies are taking some shortcuts on the production side of things to save money. Although it’s hard to get statistics on exactly how many products are poorly made, mislabeled, or contaminated, if you’re a regular visitor to dispensaries, and especially if you travel and go to different locations frequently, you know those number are quite high. Some of the product-related issues a consumer might experience include:
Ancillary companies and the ‘trickle-down’ effectAs you likely noticed in the layoffs section, it’s not just companies directly connected to cannabis products that are feeling the brunt – many ancillary companies are in trouble as well, particularly those in the software and technology sector. Leafly, Akerna, Leaflink and others are implementing many of the cost-cutting measures listed above. According to Gullickson, even though their services are specialized and needed by the broader cannabis industry, the problems facing cultivators and retailers are trickling down to non-plant-touching ancillary companies. “We’re seeing a trickle-down effect,” she wrote. “As capital and revenue declines on the plant-touching side, it strangles many of the ancillary businesses that rely on those operators for their customer base.” In Akerna’s case, the company laid off a large number of employees AND their executive team agreed to a 25% cut in compensation as part of company’s plan to “accelerate their path to profitability,” as stated in a recent press release. Earlier this year, Akerna also announced that they would be selling 365 Cannabis back to some of their previous investors, but they are selling it for much less than they purchased it for back in 2021. Final thoughtsWelcome readers! Thanks for hanging out with us at Cannadelics.com; an independent publication that brings you new and ongoing stories in the cannabis and hallucinogen spaces. Come ’round regularly so you don’t miss out on anything; and subscribe to our Cannadelics Weekly Newsletter, to ensure you’re never late to get the news. The post Cost-Cutting in Cannabis Industry, and What It Means for You appeared first on Cannadelics. Via https://cannadelics.com/2023/04/25/cost-cutting-in-cannabis-industry-and-what-it-means-for-you/
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While the US continues to go after Juul for providing a non-smoking way to get nicotine, the UK is a huge step ahead. After an independent advisory put out a report last year which confirmed that vaping is a much healthier option than smoking, the government of the UK is now instituting measures to get smokers to switch to vaping. What was the report about?On June 19th of 2022, the UK published an independent report which had been commissioned by health secretary, Sajid Javid. The main purpose of the review, is to better enable the government to tackle the issue of smoking in the UK; which has a goal to be smoke-free by 2030 (down to 5% or below). Led by Dr Javed Khan OBE, the review looked to identify more ways in which the UK government could help smokers kick the habit, with the hope of residents leading more healthy lives. The report made 15 recommendations. These points cover different aspects of the issue including increasing money for cessation programs, yearly raising the smoking age until its no longer legal for any age (similar to New Zealand), licensing requirements for tobacco providers, assessing packaging to create less desirable-looking products, large anti-smoking campaigns, and using vaping as a way to get smokers to switch from cigarettes. This last point is interesting, because of how blatantly different it is from the government stance of the US. Not only does the US government continue to tell residents that vaping is dangerous, (despite it so obviously being better than smoking), but it also keeps going after and bullying the biggest retailer for nicotine vaping – Juul; despite no confirmed reports of actual injury directly related to their products. Thanks for heading our way. Subscribe to the Cannadelics Weekly Newsletter to to stay up-to-date; and we’ll get you a bunch of offers for cool stuff, like cannabis buds, vapes and smoking paraphernalia, edibles, cannabinoid compounds, amanita mushroom extracts, and a whole lot more. Let’s all feel good, responsibly! The reason the UK put out the report is to combat the rising death and injury caused by smoking. Every year, approximately 78,000 people die across the UK, and about one in seven is an active smoker. In the year 2019-2020, 506,100 people were admitted to a hospital for smoking-related issues, a 10% increase from 10 years before. Also that year, 710,000 products to quit smoking were sold; which shows a huge desire among the people themselves for an answer to the addiction. According to Action on Smoking and Health, the Global Burden Study of Disease 2019 points to smoking as the biggest risk factor for death. Whereas being overweight contributed to 56,215 deaths, and alcohol to 25,242 deaths, smoking contributed to 119,776. Incidentally, sedentary lifestyles contributed to 14,335, and drug use outside alcohol, 5,015. Main causes of smoking deaths relate to heart disease, lung cancer, and chronic obstructive pulmonary disease (COPD). In fact, 52% of all cancer deaths were related to smoking, equating to about 35,500 deaths. Smoking was also responsible for 35% of deaths related to respiratory issues for that year, making for approximately 23,700 deaths. About 14,700 deaths came from circulatory issues, which accounted for 13% in the category; and 15% of deaths overall were eyed as smoking-related in general. UK government officially pushing vaping over smokingThe report came out many months ago, and now, the UK is finally releasing some of the new programming to come out of the recommendations. All new policies are designed to meet three goals: help adults quit smoking, to use vaping to help people quit smoking, and to stop people from starting to vape. One of the first measures? To promote a campaign for people smoking to switch to vaping. Put out by the Department of Health and Social Care along with Neil O’Brien MP, the plan is to help one million cigarette smokers, under the name ‘Swap to Stop.’ This is not about giving people friendly advice about vaping, the government will actually provide vape starter kits to the million people. Which means the UK government isn’t just saying vaping is a better option, its actively trying to get people to do it over smoking. Plus, it doesn’t stop with this swap, but is accompanied by behavioral support to effectively quit. Right now its all to be handled through the federal government, but local governments will participate later in the year; and will be able to prioritize who gets the vape products in their respective jurisdictions. ![]() What else does the new anti-smoking programming entail?Apart from the UK government encouraging vaping to get people to stop smoking, the government is instituting some other programming to reduce smoking rates. One is geared toward pregnant women, who will be offered financial incentives to stop smoking in the form of vouchers. This will be relevant to every smoking mother, and is to be instituted in full by the end of 2024. The hope is this will lead to less underweight/underdeveloped babies in need of care, and fewer miscarriages and stillbirths. Another thing? The government wants those opening cigarettes to be met with positivity and smoking cessation information. It will eventually (after consultations) establish mandatory requirements for inserts in each package. At the same time, it wants to reduce any attractiveness in packaging, that could itself attract buyers. Furthermore, since the government is now the entity providing the vapes, its cracking down on illicit sales. The government doesn’t want residents to buy anything from which it doesn’t get a cut. This keeps out dirty products, but it also means that the government is going to make people wait to quit, since it can’t provide devices to everyone at once…a huge indication this is about illegal markets as much – if not more – than improving heath. The government is shutting down illicit sellers; under the line that its to keep kids from starting to vape. The government is putting £3 million into creating an ‘illicit vapes enforcement squad,’ which actually sounds quite extreme considering its about to give the same devices out to the public. It must really want to root out competitor business. Along with this, the new strategy will also seek to stamp out illicit tobacco sellers via new regulations to be made by HMRC and Border Force. This includes targeting, catching, and punishing illicit operators. Again, this all points to ensuring tax revenue. Direct from the governmentIn his announcement, Health Minister Neil O’Brien stated: “Up to 2 out of 3 lifelong smokers will die from smoking.” And that “cigarettes are the only product on sale which will kill you if used correctly.” He went on, “We will offer a million smokers new help to quit. We will be funding a new national ‘swap to stop’ scheme – the first of its kind in the world. We will work with councils and others to offer a million smokers across England a free vaping starter kit.” ![]() According to the ministry of health, 2021 smoking numbers were the lowest on record at 13%, which shows an already existent trend away from smoking. The UK government doubled the taxes on cigarettes back in 2010, making it one of the highest cigarette taxers in the world. According to 2015 WHO data, the UK taxes cigarettes at 82.16% (85.69% as per EU data), which means the UK government makes a lot of money from these taxes. The thing is, many sales are not for legal companies, and for those sales, it collects nothing. More recently in 2021-2022, the government allocated £68 million from public health grants to services for smoking cessation. The government is also committing £35 million to the NHS this year so that every smoker admitted to a hospital can receive services to quit smoking. In terms of vaping, the NHS says that in 2021, in the age range 11-15, that 9% were using tobacco vape products, which is up from 6% in 2018. And while this should be looked at as a good thing in that it means they’re not smoking, this increase is not only being called ‘sharp,’ but O’Brien is set to launch “a call for evidence on youth vaping to identify opportunities to reduce the number of children accessing and using vape products – and explore where government can go further.” For those paying attention it means his ‘call for evidence’ is only after setting a policy. There is a massive contradiction in using vapes to help people stop smoking, just to turn around and say they’re too dangerous for kids to know about. Logically this will never make sense as tons of movies and shows depict constant smokers, something kids will learn about young. My guess is that there isn’t any intention to have kids stop vaping, and this is a move of optics. After all, the government is working so hard to corner the industry, why would it want to lessen its base of potential buyers?! ConclusionFor the most part this is great news. Even if its also an effort to streamline an industry to help ensure less illicit non-taxpaying sellers. Despite that as a possible co-motive; given the smear campaigns against vaping in the States, its a nice dose of reality. It will be interesting to follow this story, and track progress over time. Welcome readers. Cool that you’re here with us at Cannadelics.com; where we work daily to bring you top notch independent reporting for the cannabis and hallucinogen industries. Join us frequently to stay updated on important stories; and sign up to our Cannadelics Weekly Newsletter, so you’re always first to get the news. The post UK to Push Vaping: Wants Smokers to Switch appeared first on Cannadelics. Via https://cannadelics.com/2023/04/24/uk-to-push-vaping-wants-smokers-to-switch/ Are you a cannabis enthusiast looking for an incredible deal on premium THC-A flower? 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ABOUT MEHallo, ik ben Rosalina Klerkx, ik ben een RHIA-gecertificeerde zorgbeheerder met meer dan 6 jaar ervaring in het creëren van een productieve omgeving voor zorgprofessionals. Leiding gegeven aan een team van 12 opname- en verkoopmedewerkers in een instelling voor langdurige zorg met meer dan 170 patiënten. Opstellen van complexe HIPAA-conforme rapporten aan patiëntendienstcoördinatoren in een zorgkliniek. Archives
April 2023
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