California Cannabis Exodus: Wildfires & Low Prices Threaten Cultivators’ Survival
The unfortunate death of small-scale cannabis in California is happening
Small-scale cannabis farmers in California are increasingly abandoning their fields as they grapple with the dual threats of destructive wildfires and falling prices, signaling a troubling trend for America’s largest legal cannabis market. Industry experts anticipate this exodus will persist as conditions worsen.
Cannabis Farmers Denied Federal Aid
Cannabis cultivators differ from traditional farmers in that they cannot access federal aid, given marijuana’s status as a controlled substance. Anthony Coniglio from NewLake Capital Partners, Inc. (OTC:NLCP) emphasized, “These operators don’t have the ability to go to FEMA (Federal Emergency Management Agency) to get reimbursement for losses in a federal disaster zone because of the federal classification.” With the increasing severity of wildfires, this lack of financial support renders the risks untenable for many, reported by Mrinalika Roy of Reuters.
Cannabis Oversupply Drives Prices Downward
The economic landscape for cannabis in California has also deteriorated since 2021, with an oversupply driving wholesale flower prices down from over $2,000 per pound during the pandemic peak to around $1,200. “The lower price point of wholesale doesn’t create enough margin for people to take on risk of wildfires,” Coniglio remarked, pointing to a major barrier to maintaining outdoor cannabis farms.
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