A new report from Whitney Economics shed some light on the numbers coming out of the marijuana industry, and they aren’t too promising. From its survey, the research group found that 27.3% of businesses it spoke to were generally profitable. This is down from 42% in 2022, but up from 24% last year.
However, the survey found that more businesses are breaking even, with a rise from 20% (2022), 34% (2023), and now 40% this year.
Only 17.5% of minority-owned businesses are profitable.
This is mainly due to the insane amount of taxes that marijuana businesses have to deal with, and a rescheduling will immediately create some breathing room for these businesses who are dealing with the 280e taxation burden.
Luckily, the taxes don’t seem to be deterring too many consumers and pushing into the illicit market. Another survey found that 8 in 10 consumers bought their weed from legal dispensaries. I’d imagine this would mainly be true for the younger smokers who have never had to deal with shady dealers, whereas the older smokers are still used to those older, premium prices of the black market stuff.
So the demand is there, and this is a very clear instance of the government getting in the way of growth. Hopefully the rescheduling will happen sooner than later so that these struggling businesses can right their ships in time.
Read the profitability article here, and the legal market survey here.
