Issues at Curaleaf
One of the largest Marijuana multistate operators, Curaleaf Holdings, said Thursday that it will cease the majority of its operations in three Western U.S. states – California, Colorado, and Oregon – and reduce its payroll by 10% in the latest sign of the ongoing difficulties for the cannabis market as a whole.
The payroll reduction – which amounts to a 4% cut in Curaleaf’s workforce – will save the Wakefield, Massachusetts-based company $60 million in 2023, according to a news release.
According to the release, Curaleaf’s latest moves were necessary for the “future success and profitability of the business and were made as a result of recent legislative decisions, price compression, and lack of enforcement of the illicit cannabis market.”
Southern Oregon has been a case in point as regulators and law enforcement there have attempted to curtail a thriving illicit market.
According to Curaleaf, the three state markets it’s exiting contributed less than $50 million to the company’s revenue in 2022.
CEO Matt Darin said the move is about operating in markets where there’s not a huge oversupply of products and an unrestrained illicit market.
“That creates an unlevel playing field for the companies that are operating in the regulated market and following the rules,” he added. “Those are tough markets as a regulated business and as a public company.”
Other Companies Moving out of California
Jerry Garcia’s legal Cannabis brand decided the same thing this week and pulled their brand out of California.
They cited the same reasoning, the impossible task of competing with the illicit cannabis market, for pulling their brand out.
How Should this Situation be Handled
The problem in most states is the impossible entry into the legal cannabis industry. Legacy growers and retailers are still struggling with the immensely slow, and tedious process of applying for and getting approved for Cannabis licensing.
States need to offer better support systems for these growers, specifically those negatively affected by the War on Drugs to get licenses and approvals.
In the end, large MSOs like Curaleaf are going to be okay, they operate in 22 states, and have huge market shares in states where Cannabis licenses are hard to get like New Jersey. The people that get hurt are the small canna-businesses in these states, and those are the people who will need the most support from the states.
Going Forward
If you are a small canna-business who needs help in marketing, licensing, or beyond, WJ Media Group is here to help. WJ Media group offers extensive cannabis marketing options. WJ Media group also offers consulting for your business in production, licensing, finding a retail location, SEO, Web Development, Social Media Management, and more. We are located in Central New Jersey but have clients all over the country. Feel free to reach out any time to learn more about how we can further your cannabis business.
