Pretty much everyone in cannabis has struggled to get paid at some point in time. For many operators, the problem can have serious consequences—particularly small brands giving product to retailers on terms and counting on the money they’re due to survive another day.
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The issue has been top of mind as of late, particularly in California. One of the state’s biggest weed distributors, HERBL, folded in the middle of 2023, leaving countless brands and retailers in the lurch. Later that year, delivery service Grassdoor abruptly ceased operations—many brands wondered if they would ever receive payment for their goods.
Things came to a head last week when a video of a dispensary chain owner seemingly bragging about saving money by not paying “mom and pop” brands went viral, saying they’re going under anyway*. The video, which was likely taken and disseminated without consent, could have been taken out of context. However, the manner in which the operator was speaking struck a nerve with the cannabis community—especially at a time when family farms are going under, and towns in the Emerald Triangle are on the brink.
Many on social media called for a boycott of the chain and the blacklisting of the operator.
Others came to his defense, saying they were always paid on time. Regardless of fact, the episode begs a bigger question: is non-payment a symptom of bigger problems plaguing the cannabis industry? And more so, what can be done to rectify the situation?
Can cannabis be saved?
Over-regulation, aggressive taxation, lack of funding, and marketing censorship are just some of the things preventing the space from thriving. It’s almost as if legal cannabis was doomed from the jump. Unfortunately, not much is being done to fix an incredibly broken system—and any potential help seems lightyears away.
When Wall Street hedge funds and airlines take a hit, they get bailouts. But no one’s bailing out the cannabis industry. Some may argue that the failure of cannabis companies would never have the same ripple effect as a major financial institution, but the economic impact is still considerable.
Weed is a multibillion-dollar business, employing over 428,000 people nationwide. According to MJBizDaily, “For every $10 spent at a dispensary, another $18 will be injected into the economy, often at the local level.” Despite these facts, the powers that be continue to keep the industry down.
There’s no excuse for not paying people, but perhaps if the cannabis industry were designed to succeed, this problem wouldn’t be happening. If so-called “mom-and-pop brands” were set up for success, retailers wouldn’t be banking on their closure to save a buck.
Some lawmakers are trying to offer their version of a life raft, with descheduling or rescheduling a promise of hope. However, operators need help now before things reach critical mass.
At this point, something’s got to give. Perhaps if legislators and regulators understood the true impact of their indifference, they would be moved to act. Or maybe they never cared about weed to begin with.
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