420 with CNW — Small Cannabis Cultivators in Cal
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Posted On: 04/21/2023 6:26:48 PM
420 with CNW — Small Cannabis Cultivators in California Struggle as Climate Conditions Worsen
The multibillion-dollar agricultural industry has been greatly affected by adverse weather conditions, with small marijuana growers feeling the heat most. Almost 3,000 small marijuana farmers were recently greatly affected by severe weather, another blow to their businesses, which are already grappling with dropping sales, high taxes and increased competition from larger indoor farms.
The state of California has the biggest recreational marijuana market in the country. However, despite working and living in the Northern California counties of Mendocino, Trinity and Humboldt, cultivators in these parts have struggled since recreational cannabis was legalized a few years back.
The three counties make up the Emerald Triangle, which comprises communities founded by marijuana farmers in the ‘60s when individuals began growing marijuana under the thick canopy of old-growth oak, Douglas fir and redwood trees.
In the past, these small-scale farmers have waded through serious wildfires destroying millions of acres in crops, droughts that have destroyed product, the illicit market continuing to affect demand by driving prices down, and compliance fees and taxes depleting business profits.
Historic cold and snow was recently added to this list of setbacks.
Since marijuana is still considered illegal at the federal level, small growers can’t apply for federal assistance to rebuild or recoup their losses following a disaster. It doesn’t help either that annual sales for California have also been decreasing, something that hasn’t happened since the recreational market was launched.
Last year, annual legal cannabis sales hit $5.3 billion, quite a decrease from the $5.7 billion recorded in 2021.
The decline follows a bear run that drove wholesale cannabis prices to $300 per pound, which is a significant drop from the $3,000 per pound price the market experienced a few years before. This shift affected small, seasonal operators the most, as it makes it hard for them to compete with indoor growers who can grow their product year-round and better control conditions for their plants.
In 2022, California shifted the 15% excise tax burden to retailers from distributors, eliminated a cultivation tax on growers and overhauled its cannabis tax structure. Despite this, farmers are still finding it hard to stay afloat.
Farmers across the Trinity, Mendocino and Humboldt counties may soon stop paying taxes because they can’t afford to, with some cultivators going as far as to consider selling their products in the illicit market, where they can avoid taxes and set their own prices. At the moment, many are either focused on closing up shop or cutting their costs significantly.
Outdoor cultivation has its challenges as the farmers in the Emerald Triangle will testify, which is why some businesses such as Advanced Container Technologies Inc. (OTC: ACTX) have brought innovative products on the market to aid in the indoor cultivation of cannabis and other high-value plants.
NOTE TO INVESTORS: The latest news and updates relating to Advanced Container Technologies Inc. (OTC: ACTX) are available in the company’s newsroom at https://cnw.fm/ACTX
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW420, wherever published or re-published: http://CNW.fm/Disclaimer
The multibillion-dollar agricultural industry has been greatly affected by adverse weather conditions, with small marijuana growers feeling the heat most. Almost 3,000 small marijuana farmers were recently greatly affected by severe weather, another blow to their businesses, which are already grappling with dropping sales, high taxes and increased competition from larger indoor farms.
The state of California has the biggest recreational marijuana market in the country. However, despite working and living in the Northern California counties of Mendocino, Trinity and Humboldt, cultivators in these parts have struggled since recreational cannabis was legalized a few years back.
The three counties make up the Emerald Triangle, which comprises communities founded by marijuana farmers in the ‘60s when individuals began growing marijuana under the thick canopy of old-growth oak, Douglas fir and redwood trees.
In the past, these small-scale farmers have waded through serious wildfires destroying millions of acres in crops, droughts that have destroyed product, the illicit market continuing to affect demand by driving prices down, and compliance fees and taxes depleting business profits.
Historic cold and snow was recently added to this list of setbacks.
Since marijuana is still considered illegal at the federal level, small growers can’t apply for federal assistance to rebuild or recoup their losses following a disaster. It doesn’t help either that annual sales for California have also been decreasing, something that hasn’t happened since the recreational market was launched.
Last year, annual legal cannabis sales hit $5.3 billion, quite a decrease from the $5.7 billion recorded in 2021.
The decline follows a bear run that drove wholesale cannabis prices to $300 per pound, which is a significant drop from the $3,000 per pound price the market experienced a few years before. This shift affected small, seasonal operators the most, as it makes it hard for them to compete with indoor growers who can grow their product year-round and better control conditions for their plants.
In 2022, California shifted the 15% excise tax burden to retailers from distributors, eliminated a cultivation tax on growers and overhauled its cannabis tax structure. Despite this, farmers are still finding it hard to stay afloat.
Farmers across the Trinity, Mendocino and Humboldt counties may soon stop paying taxes because they can’t afford to, with some cultivators going as far as to consider selling their products in the illicit market, where they can avoid taxes and set their own prices. At the moment, many are either focused on closing up shop or cutting their costs significantly.
Outdoor cultivation has its challenges as the farmers in the Emerald Triangle will testify, which is why some businesses such as Advanced Container Technologies Inc. (OTC: ACTX) have brought innovative products on the market to aid in the indoor cultivation of cannabis and other high-value plants.
NOTE TO INVESTORS: The latest news and updates relating to Advanced Container Technologies Inc. (OTC: ACTX) are available in the company’s newsroom at https://cnw.fm/ACTX
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW420, wherever published or re-published: http://CNW.fm/Disclaimer
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