The Crumbling Business of Marijuana
The Crumbling Business of Marijuana
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There are few business sectors that have collapsed as dramatically as cannabis. Once projected to generate billions in new business, radical social reform, job creation, and rapid growth, the industry has devolved into a commoditized race to the bottom. But these days, with competition everywhere, profits have collapsed and no one has been able to figure out how to compete at scale on anything besides price. From one angle, this was just a case of too much supply for too little demand. From another angle, commoditization was always inevitable. But market correction shouldn’t mean collapse. What’s left today is just business – regulated, fragmented, ruthless, and perfectly competitive where only the smartest survive.
Every industry has its gold rush. For cannabis, the “Green Rush” started in 2012 when Colorado and Washington became the first U.S. states to legalize recreational marijuana. As more states and countries joined in after 2012, every link in the value chain—from farming to retail—was up for grabs. Startups burned through millions in venture capital, building fast and talking big. When Canada legalized marijuana in 2018, it gave these same companies the means to pump-and-dump weed stocks. But just because the corporations are losing money, doesn’t mean everyone else is.
While they’re hemorrhaging cash, local, self-funded dispensaries are quietly surviving. For them, profit isn’t a future goal—it’s a mandate. California is the world’s largest and most competitive cannabis market. In 2023, $5.1 billion of legal cannabis was sold in the Golden State, with another $8 billion moving through the black market. Los Angeles County alone reigns as the highest-grossing market, with 5 to 10 times as many sales as any other county in the state.
In this Modern MBA Original, we go from the macro-to-micro to analyze the economics of legal cannabis from the global corporations all the way to three independents in the world’s most competitive market.
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The industry would be even better if we could buy online from these dispensaries from other states to try other brands and strains
I already watched and disliked this video. Why is it recommending it again?
I wilingly take any surplus stock at no cost.😊
Last kind of clinic you want to go to is one ran like the guy named Jay.
They took weed to far. Always taking shit to the extreme. Leave weed as weed and leave it alone.
Despo weed is trash.
Paid $80 for a 1G vape in Illinois the other day. Never again. Black market only
F their legal high prices…i will always buy black market
Crumbling my ass!!!
This really only applies to that area. The dispensaries in my area (Cali, not in LA) are as busy as ever and prices are cheap, cheap enough to kill most street dealers.
Before I left I didn’t know anyone that went to the store. It was more or a treat if you wanted something special. The amount of people that were home growers, some even rented out multiple properties to grow, would surprise you.
bob and nick are my bosses!!! proud of them :,)
legalizing weed turned hippies into republicans lmaooooo
Large numbers of profit seekers with no cannabis knowledge… Failure is by design. The Legacy, which made re-legalization possible, will rise as those who made false claims run out of funding.
Lack of quality… That is why there’s no profit. Low grade flower contaminated with pesticides and herbicides… That only leaves price left.
In Canada, people have lost 131 billion dollars from 2018-2022 investing in cannabis company stock. Artificially inflated value then the company management sold out leaving a worthless company. Big time scammers.
The green rush was profitable for scammers who sold stock for big money, that was worth nothing.
aweee poor capitalists can’t just sit on their ass and exploit workers
imagine fucking up selling weed.
These stats are hilarious!!! 😂😂😂
I like the eddibles
I feel like if any weed product is ever going to be the next *it* brand the way Marlboro or Busch captures industry it’s going to need celebrity endorsement from within the marajuana culture.
You know your bureaucracy is fucked when they lose money selling weed.
I for one am relieved it wasn’t taken over by giant corporations. I never recognize the brand names in the store but they all still seem to be small-scale producers. I never wanted a marijuana Heineken or Miller.
Black market is still winning lol
No problem spending billions fighting cannabis, but when taxes get paid… No support? Endless hypocrisy.
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Shop quality is bad…
You can only sell an over-priced $200 ounce that taste like leaf, before your customer decides to never even try to buy that crap ever again.
Its not a factory made product! Its a plant crop
*YOU cant smell it, YOU cant sample. Just give us your money and role the dice, if you get home and it sucks, then YOU lose!!*
Its as if the plant is resisting commercilaization and cooperatization!
it has democratization in its DNA
Trees
“We were only charging 2x price and if we bogo we don’t make a profit.” HOW ABOUT NOT MAKING 2X and make 30% like most businesses
As long as im around “marijuana” will be in business 😂
“Moving through the black market”
You mean our neighbors
Once you bring it to mass market it goes downhill…
0:49 why would anyone buy black market weed when it’s literally legal? The fact that illegal sales make so much more than legal ones in the most marijuana friendly place on earth is baffling me.
Yeeea, i switched to cocaine now, marijuana is just a gateway
Trees
Punishing cannabis users is the plan. We dared to refuse the evils of prohibition.
I live in Montana and grow my own high-quality organic sticky sensimilla. And so do most of my friends. I have friends give me free samples of their homegrown and I share mine with them. I haven’t paid for weed in years and don’t use dispensaries. Missoula is awash in high quality homegrown weed🥴😁✌️ No recreational in the deep south and Bible belt. Morons😂😂😂
wish they had included more states like MI, OH
if they are failing it is because they charging double the price for shittier green
you misspelled booming stop spreading lies
now is the time to get in.
I live in humboldt county. Too many people just tried to get into the weed business, like back in the days of our "green rush" when opportunists from all over the world came here just to make money with no intention of being part of any community here. They’re all gone now because there were too many doing the exact same thing. That will also happen with dispensaries and weed opportunists everywhere. I can get pounds for free sometimes. I’ll buy $10 1/8ths from a dispensary on occasion, but no way am I going to pay more than $20 for an 1/8th. Turning something enjoyable into a business usually kills the soul of the thing. Not to mention weed culture is not what it was when I was young. Now it’s filled with undesirables. I like weed, but want no part of the "culture" that exists today, and I don’t need some 20 something kid with a nose ring or flat billed cap telling me about the virtues of some dumb strain.
36:34 I believe this information goes for any business that is selling product as well. Thank you, very good stuff to have for brain food!
No one wants prepackaged heavily taxed bullshit
Idk I like the way Michigan does it. Seems pretty reasonable to me.
California cannabis at the dispensaries was fire back in 09-2017 when it was only medical not recreational. They should have kept that model. The flower was higher quality, and the product was cheaper and you were always getting freebies. You can smell and see the product and could buy flower from 1 gram to 1 ounce and get a discount for buying more. You were not forced to buy 1/8s. You could also smell the shop a mile away despite having like 10 large carbon filters throughout their facility.
It was better for small businesses back then too because there was space and/or plant limits, so all the products were more like farmer’s market than a grocery store market.
19:21 – An actual weed store owner taking about "keeping their tegridy" 🤣🤣🤣🤣🤣
They didn’t make it legal, they just let themselves be the only dealers.
By controlling it and charging outrageous taxes on it.
The day they opened shops, the black market price went from $40 to $20. HALF!
But the shops still want the full $40 black market price, many years later and they refuse to half their prices.
Its not legal until the gov lets anyone grow it anywhere, like a tomato. cuz its a harmless medical herb.