California’s legal pot market has lost hundreds of pot farms a month as farmers opt to quit the legal market. And signs indicate the industry is only continuing to shrink.
The state has lost 1,766 cultivation licenses since the beginning of last year, according to data reported by the California Department of Cannabis Control and the Cannabis Business Times. Low wholesale prices and high taxes have made it almost impossible for operators to run a profitable small business, pot industry insiders say.
The fleeing farms are reducing the total amount of space licensed to produce cannabis in California. The state has lost 23% of its total legal canopy — the combined size of all legal cannabis grows — since the beginning of 2022, according to Aaron Edelheit, a cannabis investor who analyzes California’s market. That’s over 19 million square feet of cannabis farming that has disappeared over the past year.
Max Rudsten, chief revenue officer of Monterey’s POSIBL cannabis farm, said he expects the industry to continue bleeding farms throughout the year. “We expect this loss to accelerate as more businesses decide the same fate,” Rudsten said in an email.
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