U.S. Cannabis Operators Facing Downward Pressure On Demand In Q4

Economist Beau Whitney is forecasting a return to normal growth for U.S. cannabis.

Cannabis Cultivators, Processors & Will Face First-Ever Demand Slowdown in Q4

  • Massive growth in demand for cannabis during 2020-2021 is not sustainable in the coming years. 2022 will represent an inflection point, and a return to normal demand.

  • The Covid-19 surge in demand for cannabis products is slowing as workers transition back into the office after nearly two years of working from home. 

  • Cannabis operators must consider how to navigate the uncertainty of slower demand growth in advance of the post-covid era.

  • Operational discipline will define winners and losers: cultivators, processors and retailers will be wise to tap the brakes now and slow production, so they do not have to adjust to a larger correction later.

U.S. Cannabis Experienced 35% Year Over Year Growth During Covid-19

The U.S. cannabis industry experienced a huge boost in demand during the Covid-19 period of 2020 – 2021. Over the past 18 months, growth has been far stronger than normal. The combination of three major factors resulted in back-to-back 35% year over year demand growth for cannabis in the United States: 

  • The designation of cannabis as an essential business during Covid-19 

  • The expansion of adult-use state markets 

  • The implementation of work from home policies, directly impacting tens of millions of workers 

  • Demand for cannabis in the United States will slow overall, and Whitney is predicting that a return to work will be a key driver to this lower demand. This demand slowdown will be more visible in mature state markets, while the impact may be …

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