New Report Sheds Light On US's $3.8B Illicit Cannabis Markets & Industry-Wide Impact
The report issued by analysis firm Whitney Economics underscores the urgency of addressing delinquencies amidst ongoing federal reforms.
Despite ongoing discussions surrounding federal reforms such as de-scheduling and safe banking, the report emphasizes the immediate challenges faced by everyday operators. Delinquencies, highlighted as a pressing issue, have reached a critical point for many operators, jeopardizing their financial sustainability.
Key Findings From Report
The report reveals staggering figures, indicating total delinquent accounts receivable amounting to approximately $3.8 billion.
This sum translates to 1.6 months of legal U.S. cannabis retail revenues in 2023. Particularly hard-hit is the cannabis cultivation sector, contrasting with the relatively lesser impact on retail.
Industry-Wide Impact And Disproportionate Effects
Delinquent payments reverberate throughout the industry, disproportionately affecting smaller and minority operators.
Survey data underscores the severity of the situation, with 44% of respondents citing impacts on debt servicing and 34% on tax payments.
Notably, delinquent receivables outweigh federal tax code 280E in terms of business impact for 57.3% of respondents.
Delinquent receivables predominantly plague adult-use and medical cannabis sectors, with the hemp cannabinoid industry experiencing lesser impacts currently.
