The OG Collective
Cathedral City, CA
Another month in the books for all the courageous cannabis entrepreneurs here in the great state of California. As I write this, we have a little more than three months under our belt in this unknown frontier known as “adult-use.” While three months isn’t an enormous amount of time, it’s enough to see trends and behaviors starting to take shape. Some of these trends we predicted; some come as a surprise.
First and foremost, banking has been and will always be the Achilles’ heel of the cannabis industry. Not being able to bank like every other legal business in the United States is not only discriminatory, short-sighted and unnecessary, but it is also incredibly dangerous. The fact that we have to hire armed security to transport funds and protect employees has to be a red flag to the state. Some type of state-backed institution needs to be formed immediately to remedy this issue before something terrible happens.
Another issue to explore is the manner in which the industry is being taxed. With local municipalities, especially Los Angeles, unable to shut down illegal operators, how can we expect consumers to absorb what ends up being a 35% tax? Why squeeze so hard that you drive consumers to the black market? Why punish the operator trying to do things the right way? The state is supposedly in discussions to lower the tax at least temporarily and that’s a smart move. Lowering it permanently would be even smarter.
Finally, there’s brands, brands and more brands. I challenge someone to tell me how many edible brands there are in the industry. There are thousands last time I checked. How will this play out? Seems that a few are well known in certain areas of the state, others elsewhere. Does brand loyalty exist in this industry? Does the consumer care? Will restrictions on advertising prevent a Coca-Cola from being built in the industry? Do consumers just buy what the budtender recommends?
It’s going to be interesting to see how these trends develop …