Victoria, BC

Join us on Vancouver Island in majestic Victoria, BC for 3 days of cannabis cultivation and extraction.

June 20-22, 2022

Niagara Falls, ON

Join us in spectacluar Niagara Falls, ON for 3 days of cannabis cultivation and extraction.

September 12-14, 2022

Grow Up Awards Gala

Annual Grow Up Industry Awards. Come celebrate the innovation and sucess in the cannabis growing industry.

June 20, 2022, Victoria, BC

Oversupply, high taxes forces some legal growers in California to let their bud turn bad: Report

Dec 29, 2021 | Media Partners, The GrowthOp

This post is presented by our media partner The Growth Op
View the original article here.

Oversupply has reduced the price of a legal pound of pot in California by more than 80 per cent for some growers.

Article content

Oversupply is not a new issue in the cannabis industry.


Story continues below

Article content

In 2019, when there was reportedly a shortage of legally grown cannabis in Canada, industry experts predicted that would soon turn to a glut , a situation that had previously unfolded in some legal states. Still, Canadian licensed producers rushed to acquire massive facilities with huge yield potential, even without any demonstrated demand for their products. Then the predictions came true .

And though California is now five years into legalization, Forbes reports some growers have had to let their bud turn bad this year due to high taxes and a flood of suppliers.

  1. Although cannabis licensed producers (LP’s) and even provincial cannabis boards repeat the mantra that more supply and lower pricing is required to drive out the black market, why are big LPs so intent on growing more cannabis and producing more derivatives? PHOTO BY JOSEP LAGO/AFP VIA GETTY IMAGES

    Canada’s cannabis industry has many problems, the biggest of them all is that it’s a cash-burning machine

  2. LP Aurora Cannabis has listed its Exeter, Ont. greenhouse for $16,999,000

    Looking for a greenhouse? Struggling Aurora puts another asset up for sale

  3. The concept of edibles working best when served as a dessert isn’t surprising given how “weed brownies” have become synonymous with the consumption of edibles. /

    Debunking four common myths about cannabis edibles


Story continues below

Article content

Citing figures from the California Department of Taxation and Fee Administration, Forbes reports that California growers were set to grow more than 1 million pounds (453,592 kg’s) of cannabis this year.

That’s a huge amount of pot, but it’s not just the competition that California growers need to worry about. According to Forbes , taxes are due in California as soon as cannabis products enter the supply chain. This year, growers are charged US$9.65 per ounce, which adds up to more than US$150 ($191) a pound. That would be okay if pounds were still fetching US$1,600 ($2,047) or more but with oversupply reducing pot prices to as little as US$300 ($383) a pound, it’s now a problem.

That’s been the case this year for Mendocino County grower Blaire Auclair, who grows her cannabis under the ‘Radical Herbs’ brand.


Story continues below

Article content

Auclair told CBS San Fransico earlier this month that overproduction by large farms has led to her product selling for about US$300 a pound and almost half her revenue is now going to taxes.

“There’s county taxes, there’s city taxes, it’s like, every chance somebody gets and it’s not a little bit — it’s a lot,” she said. Once all the costs for labour are factored in, harvesting a $300 pound just isn’t worth it for some growers.

According to Katz, the oversupply, high taxes and extensive regulations are simply too much for every grower to navigate.

“All of these things are combining to create what’s really an existential crisis and another in a series of extinction events for these small cannabis operators,” she said.


Story continues below

Article content

We apologize, but this video has failed to load.

Subscribe to Weekend Dispensary, a new weekly newsletter from The GrowthOp.


    Story continues below


    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

    This post was originally published by our media partner here.


    O’Cannabiz – June 1-3, 2022
    International Convention Centre, Toronto ON

    Grow Up – June 20-22, 2022
    Victoria Convention Centre, Victoria ON

    Grow Up – September 12-14, 2022
    Niagara Falls Convention Centre, ON

    News from Grow Up Media partners