Banking & Finance

Growers Alarmed As Marijuana Wholesale Prices In California Drastically Decline

Growers Alarmed As Marijuana Wholesale Prices In California Drastically Decline - Marijuana Packaging

After years of rising cannabis production in California, since its legalization in 2016, it appears to be weighing down on the state’s wholesale market. Prices are said to be dropping up to 60% since mid-June for outdoor-farmed marijuana. Although the downward pricing pressure hasn’t affected every cultivation faction, this has alarmed cultivators all through the state. Indoor growers seem to be on the better end of things, with wholesale prices reportedly down 10% – 20% in comparison to outdoor farmers. Many expect this trend to continue for months, if not years, due to the ever-growing amount of cannabis production in California.

The policy director for the Humboldt County Growers Alliance, Ross Gordon, said, “Probably a conservative estimate is we’re about twice what the domestic market can consume, and that’s with current permitting levels.” He went on further to say, “We’re looking at prices that are as bad or worse than they’ve ever been, it’s the No. 1 thing on pretty much every farmer’s mind right now.” The price deficit has had a bigger impact on outdoor growers in contrast to indoor cultivators, due to being more insulated from what Northern California farmers call a market crash. Most outdoor growers customarily hold on to a good bit of their harvests from each fall to sell in the following spring or summer, when there’s usually less supply, which commonly has resulted in a wholesale price spike.

Unfortunately, there was no spring price spike this year and Humboldt’s outdoor growers had to compete with cultivators using light-deprivation techniques that give them two to three harvests a year. There are a ton of factors at play that come down to more than not having enough mylar bags to store your harvests.

One of which Gordon said was a, “structural oversupply problem.” He estimated California has roughly 1,700 acres of cannabis production that’s operational, while the state’s marijuana consumers account for only 1,000 acres worth of sales annually. Many are in agreeance that the price dip won’t reverse anytime soon and that stakeholders should prepare themselves accordingly. With the big price drop for outdoor growers, there’s no telling what this could mean for the marijuana community and culture.

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