Author: Joy

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On May 13, 2022, the Governor’s Office released a revised 2022-2023 state budget proposal that includes reforms to state cannabis taxes. One of the more significant changes would lower the cultivation tax rate to zero. The proposal comes after the wholesale price of flowers dropped to as low as $400/lb in some parts of the state and growers became desperate for financial relief. Other budget updates include revised cannabis tax revenue allocations and strengthening tax enforcement policies.

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

Excitement and interest is booming, and New Jersey is leading the way with $2 million in cannabis sales on their first day. With other east coast dominos lining up, preparing to kick off adult-use sales, a massive wave of excitement is flooding the entire eastern side of the country. On the flip side, tension is building on the west coast, where extensive industry battles are threatening the existence of many operators that helped to shape these markets into what they are today.

Bryan Fields, Eighth Revolution

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

The cannabis industry celebrated its favorite holiday with 420 and New Jersey opened its doors to the first recreational cannabis sale. The hemp genetics section of the supply chain continues to experience a strong 2022, with seed and clone prices up 70% year over year. The industry continues to navigate financial, logistical, agricultural, political, and supply chain-based issues with more farmers and acres being planted in the southern states. We believe this is the driving force behind increased genetics prices this year.

With the northeastern states bringing recreational cannabis programs online, further support for the hemp industry will follow. States with legal cannabis programs tend to have higher CBD consumption and provide more support to their hemp programs from a government level. The perfect example is New York recently expressing that it will allow provisional marijuana licenses to hemp cultivators already licensed in the state. This essentially provides a lifeline to struggling CBD companies and helps the state shore up any potential inventory shortages that could force consumers back to the legacy market. Legal cannabis will no doubt be good news for operators in states currently lacking one.

Kellen Finney, Eighth Revolution

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

Reading through headlines this month you can feel the change in the air with several companies posting double-digit percent increases in revenue and several large companies posting double-digit percent decreases in revenue. The CBD and minor cannabinoid markets experienced a relatively stable month, especially when compared to the overall global securities market. As with all other agricultural-based industries, operators should at least be aware of the global fertilizer market landscape, as current unrest in Europe will drive raw ingredient prices higher resulting in higher operating expenses downstream. The cannabis industry continues to be a battlefield on the west coast and a brand new market on the east coast. It will be exciting to observe how quickly the East Coast markets mature and if they make the same mistakes the West coast did when bringing markets online. We look forward to providing you with consistent reliable information to navigate both the established and emerging markets

Kellen Finney, Eighth Revolution

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

The cannabis thesis continues to validate what most Americans already feel. Americans are ready for Cannabis legalization. 70% of Americans support cannabis legalization. 7 out of 10! That number is staggering when you break down how divided we are over some, let’s call it, basic human rights issues.

Here are signs the thesis is strengthening: New Jersey adult use is live. New York is meandering toward online. Rhode Island just legalized. Maryland and Pennsylvania are all trending in the same direction. This is what substantial industry progress looks like to the outside industry. The outside industry believes the Cannabis industry is thriving. When you look under the hood it tells a different story. Internally, the Cannabis industry is fatigued and it’s becoming more evident and harder to ignore.

California Cannabis Operators are fighting to survive. California is the largest domestic market—is this the thriving perspective that outside industry sees happening? Where is the complete disconnect between inside and out? Cannabis isn’t the only industry fighting exhaustion or burnout. Burnout is happening in other industries. Post pandemic has nurses reconsidering their place in the industry. According to Mckinsey, “1 in 3 nurses plan on leaving within the year.” 1 in 3!

While the Cannabis industry faces different obstacles the same constant applies. Exhaustion from industry-related challenges, pandemic, markets being bloodied, war, potential recession, supply chain, the list is hard to even write. Overcoming all of these obstacles on a regular basis is exhausting.

Is this the next phase of industry maturity or just another obstacle the Cannabis industry needs to overcome? Exhaustion is a byproduct of continuing to fight forward on all fronts. What needs to happen? Relief in some capacity. The industry could use a victory such as safe banking. We have come close before and the hope to disappoint cycle layers on top of the industry’s challenges have lessened the morale.

Let the record show that this is a generational opportunity, the ability to be a part of an economy that could likely disrupt all industries, pharma, tobacco, alcohol, CPG, etc.

Every step forward leads to five steps back, which is tedious and exhausting, but eventually, you’ll come across a tiny glimmer of hope that reminds you of why you are here, and inspires you to keep moving forward.

The thesis is the same.

Stay on the path it’s still happening.

The visual, by Jack Butcher, sums it up beautifully.

This may feel pointless, but we may just be one step away from a true breakthrough.

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.