California cannabis market a challenge, but it’s not all doom and gloom

Experts agree the California recreational marijuana market is extremely challenging because of high tax rates, huge illicit production and consumption as well as an uncertain economy amid the coronavirus pandemic.

But while much of this is unfair to legal marijuana business owners, one also must keep things in perspective: California is a new market with “brand-new baby regulations,” cannabis attorney Katy Young said Tuesday during the MJBizConNEXT Direct virtual conference.

“It’s a challenging environment, it’s difficult to make money, but it’s not impossible to turn a profit,” Young said. “Everyone is learning as we go along …. I do see the market improving over time as regulations mature.”

Young’s comments came during a panel discussion titled, “Key Market Insights to Embrace the Future. Searching for Stability: Surviving in California’s Cannabis Market.”

Ideally, of course, tax rates would be slashed, all municipalities would be required to allow rec sales and the illicit market would be squeezed out by statewide access to safe, high-quality and competitively priced products.

But, in the absence of major reforms in California, the experts hit on a number of key points in the search for stability in the market:

  • Young, managing partner of Ad Astra Law Group: A big enough war chest to survive the ups and downs. She also advised having a litigation budget.
  • Robert Hunt, principal of Linneae Holdings, a private equity firm: Manage your entire supply chain. Picking your vendors and suppliers is critical, he said. And “cash flow is king.”
  • Avis Bulbulyan, CEO of Siva Enterprises, a cannabis business development and consulting firm: Understand the line of business you’re in and your position in the supply chain – and understand the needs of others in the supply chain.
  • Virgil Grant, founder and CEO of California Cannabis West Coast, a Los Angeles-based marijuana operator: To plant your roots and grow a robust business, you need to understand the industry you’re operating in, plus the culture and people you’re servicing.

– Jeff Smith

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One comment on “California cannabis market a challenge, but it’s not all doom and gloom
  1. Pat on

    Gloom and doom? Yep. The manner in which the state legislature moves on this issue to make things “more equitable” and reasonable, is not forthcoming anytime soon. Why? Well… It’s all about the money. Not about public health, public safety, the environment nor anything remotely close to social equity. This thing is going to keep imploding over time no matter what these attorneys/consultants have to comment about “hope” for improvement around cannabis regulation in ca. the way things have been going. And now, Covid-19. And it’s C-19 that’s going to break this ca. laws’ back. C-19 is exposing so much that’s been wrong in our society. C-19 is has been an “accelerant” to what has been the ongoing and inevitable dismantling of the effectiveness of this law in its current iteration.

    The writing has been on the wall long enough where those that got screwed in the process of “legalization” went back underground ( They were made illegal again thru real fault if their own ). With even more vigor and a sense of rightousness. Even though what they are doing is against the “law.” However, their rationale is that it’s a corrupt law. And they’re right.

    Go to my comment in May 8, 2020 article as it relates C-19; and the June 12, 2020 article and my comment regarding the unknown, chicken sh*t BCC regulator calling out more than 1/2 the state being “bizzare” for wanting to exert their rights against some of the “provisions” of the law that the BCC thinks it’s allowed to exercise. They’ll lose. Why? Their eye is on the money, and not the law. The law was arranged, put together and promulgated around a select group of special interest’s to benefit from, and not the ca. public’s welfare in any real regard.

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