Is The Cannabis Industry in a State of Crisis?

Whitney Economics recent Q4'22 Cannabis Operator Sentiment & Business Conditions Survey revealed some very compelling insights.

RESPONDENTS ON CURRENT CONDITIONS FROM Q3’22 - RESULTS

Source: © WHITNEY ECONOMICS, LLC. 2023 - Q4'22 Cannabis Operator Sentiment & Business Conditions Survey

One statistic that stood out the most is that only about 25% of the operators who responded reported to be profitable. Check out the full report here.

At times I notice a misconception of the cannabis industry being a cash cow, which could not be further from the truth. I'm no financial advisor but I do know there's a distinct difference between revenue and profits.

Between expenses, the huge tax burden, and strict regulations this stat really does not surprise me. So how do we try and resolve this?

Operators must perform at peak efficiency to be successful in the long run. This includes their internal processes and most importantly the technology they implement, especially their POS.

If I was a new operator in today's market I would do the following, in this chronological order:

1. Review internal tech stack and all integrations - the POS and the data it collects is the focal point of the entire business, make an informed decision by conducting proper research and due diligence.

2. Asses processes and workflows - the technology implemented will have some direct influence in building out workflows for the FOH/BOH and managing inventory.

3. Strategize operations - evaluate seasonality and industry impacts of the market to ensure the customer base is provided with the most optimal products and experience.

I strongly believe these three steps cover the bases for many of the new operators to ensure their success.

What would you add to this list?