From farm to retail, there have been significant changes in the cannabis industry in recent months that have been detrimental to generating revenue. Unfortunately, this is coming at the cost of employees.
According to MJ Biz, there have been hundreds of layoffs in the cannabis industry over recent months — a commonality within all sectors right now. The fears of a recession and inflation have hit the cannabis industry heavily as retail outlets and cultivation centers are shutting their doors.
Corporations like Weedmaps, AZ Medicine, and Lume Cannabis — based in California, Arizona, and Michigan, respectively — have either laid off employees or shut down stores amid an economic decline. It’s the result of a few issues, including the price of wholesale cannabis, shifting organizational and executive structures, and customers facing financial matters themselves.
Weedmaps cut about 10% of its employees due to declining markets in California, Colorado, and Oklahoma. AZ Medicine’s sales decline results from Arizona’s rising recreational cannabis market, cutting off nearly 100 employees. Lume Cannabis is bringing its stores to more vibrant areas, but recently it closed about 30 stores.
The layoffs and shuttered businesses reflected across legal markets across North America, Canadian companies included, are seeing a decline in sales, resulting in a smaller workforce, even as the price of wholesale cannabis declined.
An irony in the situation is as they lay off employees, they face issues with staffing. Turnarounds at companies are leading and minimizing the workforce at the hands of executives with little knowledge of the cannabis industry, making it difficult even to have stores running efficiently. Still, in Canada and legal states, these companies hope it’ll help them compensate for the lost costs.
The structural changes in staffing are a reflection of its commercialization. As we’ve seen with produce and meat, pre-packaged products are taking heed among consumers who aren’t as concerned with discovering the specifics about their favorite strains.
Due to the rapid changes in the cannabis industry, it’s hard to predict which direction the market will move next. Unfortunately, the taxes and rigid regulations have turned marijuana into a high-stakes sector to participate in. Venture capitalists aren’t as readily available to leap into the cannabis industry as they once were, making funding scarce across the board.
All of these moves come at the cost of employees, especially as everything, from e-commerce to exercise equipment companies, is seeing a stall in financial growth. Marijuana companies need to ensure that they have enough money saved up for a rainy day, especially since sales have slowed down significantly in the post-pandemic world.