The cannabis industry is like any other. Every month, mergers, acquisitions, and business moves can make or break retailers, cultivators, business insiders, and industry leaders. Keeping up with changing business developments within the industry can be challenging, especially since many moves don’t always make the front page like other, more prominent industries.
What are the most exciting cannabis business developments this month? Check out the October cannabis business development round-up.
Oregon Cannabis Groups Merge
Much of the West has seen a slowdown in recreational cannabis sales. From California to Washington, sales have slowed, and an oversupply of the product has besieged cannabis companies. With no safe banking practices, heavy taxation, and the prohibition of moving cannabis across state lines to sell in other booming markets, the Western U.S. has seen a bit of a marijuana bust. Some retailers stalled growth plans and even had to shut their doors. As growing pains persist, two significant cannabis trade and lobbying groups in Oregon are announcing a major merger.
The Oregon Cannabis Association and the Cannabis Industry Alliance of Oregon unanimously voted to merge their organizations. The organizations hope the merger strengthens their ability to advocate for a thriving and safe legal cannabis industry in Oregon. Together, they hope to modernize regulations, strengthen economic opportunities, and stabilize the licensure system.
In addition to an economic cannabis slowdown, Oregon’s image took a hit when it came to light that marijuana chain La Mota failed to pay certain taxes and faced vendor lawsuits. Previous Oregon Secretary of State Shemia Fagan had a lucrative consulting contract with the same company. The scandal tarnished Oregon’s legal recreational marijuana reputation, something the newly combined cannabis groups want to help overhaul.
“Croptober” in Jeopardy After Surge in Layoffs
Affectionately dubbed “Croptober,” the fall months are when most of the outdoor cannabis harvest comes in. However, cannabis companies are scrambling to get harvest workers in the door and out into the fields after numerous layoffs over the past 18 months. The competition to secure seasonal workers to bring in the fall cannabis harvest is now fierce.
Responding to economic changes in the industry, many cannabis cultivators reduced their full-time workforce. Oversupply, high interest rates, and inflation hurt many cannabis companies across the U.S. and Canada. Many companies turned to layoffs to help offset their financial losses and stabilize their businesses. However, those layoffs came at a price. Many find they need the help they let go to bring in the fall harvest.
Some companies want to do more with less. In contrast, others still believe they can extend their cost-saving benefits by hiring temporary laborers to help with the harvest instead of investing in more full-time employees. There is an increased demand for temporary employees who can do the difficult, manual work of bringing in the cannabis harvest. However, recruitment costs, higher wages, insurance premiums, and background checks may affect the perceived savings of hiring temporary cannabis workers.
Expanding Cannabis Banking Offerings
No, Congress has not yet passed the SAFER Banking Act. Although the renamed measure has made progress in the Senate, its fate remains to be determined in the face of the House circus that is the debate over who will become the next Speaker. However, Affinity Federal Credit Union and Green Check are partnering to offer their customers banking and technology solutions.
The partnership aims to extend services to cannabis-related businesses within the communities the companies already serve. The partnership should offer comprehensive support, consumer products, transaction monitoring, and educational resources to those in the legal cannabis market. This partnership enables New Jersey-based Affinity to expand access for markets that include legal medicinal and adult-use cannabis. During the first year after the program launch, Affinity will waive application fees connected to the approval process for CRBs who want to bank with them.
Minority-Owned Businesses in Colorado Join Forces
Four minority-owned cannabis businesses in Colorado are joining forces. Opening a physical location in Colorado to produce recreational marijuana products is not easy or cheap. The owner of Denver’s first legal cannabis tour bus company knows this from firsthand experience. While looking for potential brick-and-mortar locations with a classmate, Sarah Woodson found a creative solution to one of the most intimidating challenges cannabis retailers in Denver face. Where can you find an affordable space and the materials to create recreational cannabis products? Woodson found the answer in a 10,000-square-foot warehouse designed to support multiple manufacturers under one roof.
Four new minority-owned businesses are preparing to start operating out of that building, producing unique edibles and concentrates. Their products should be available to consumers in local dispensaries by the end of the year or early in 2024. The Color of Cannabis also relocated their headquarters to the warehouse. Woodson hopes others take note, saying her model could help empower more social equity for cannabis licensees. Housing multiple producers under one roof helps make getting into the industry more affordable, especially for minorities and those disproportionately impacted by marijuana prohibition.
All four businesses in the warehouse produce cannabis products, from coffee to Hispanic-inspired sweet edible treats and concentrates. Each business owner gets to focus on their unique cannabis idea or approach while feeling like they can belong to a large community designed to support their dreams of entrepreneurship and economic freedom.
Cannabis Company President Stepping Down
Another major announcement in the cannabis industry comes from the country’s leading cannabis company, Trulieve. The company announced its President, Steve White, is stepping down from his position in October, instead preferring to serve as a strategic adviser to the company until his retirement at the end of the year.
Trulieve has been an industry-leading cannabis company with operations in 11 states. The company provides innovative and high-quality cannabis products to retailers in Arizona, Florida, and Pennsylvania. White also co-founded Harvest Health & Recreation before Trulieve bought it.
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