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California Cannabis Debt Bubble On Verge Of Bursting

Wave of business failures is on the way if the debt bubble explodes

A slow but steady years-long trend of licensed marijuana companies in California not paying all of their bills might be nearing its climax, industry insiders warned, and a wave of business failures is on the way if the debt bubble explodes.

The lack of overall profitability for several years running – along with myriad other financial challenges –  has led many businesses to shuffle payments around, delay payments to vendors, or not to pay at all, industry insiders said.

The amount of overall debt carried by legal operators is hard to pin down, but one industry leader pegged it at more than $600 million.

“It’s probably ballooning quickly now, because people have no dollars left, and there isn’t a light at the end of the tunnel, and no one’s investing,” said Jerred Kiloh, the owner of The Higher Path, a licensed retailer in Los Angeles. Kiloh also serves as president of the United Cannabis Business Association (UCBA), one of the largest cannabis trade organizations in the state.

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Marijuana Retail Report, is a national daily online trade publication serving retailers of marijuana products and accessories. News and information are geared strictly to select retail channels, with distribution limited to licensed collectives, recreational retailers, accessories retailers, and wholesalers.

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