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This week, New York Federal Reserve President John Williams said he expects the country to dodge a recession, but other economists believe the chances as much higher.Įconomists at Nomura Holdings, for example, said on Monday that the U.S. Government officials and economists, meanwhile, offer a wide range of predictions about the possibility of a prolonged downturn in the U.S.

I would expect the same trend in cannabis during an economic slowdown.” “Instead, what we see is the consumer looking for value alternatives. “If you look at alcohol beverages, economic downturns typically do not hurt the industry,” he said. Jason Vegotsky, CEO of Petalfast, a sales and marketing agency for the cannabis industry based in Irvine, California, agreed. “However, using the spirits and tobacco industry as an anecdotal guideline, historically these industries have experienced fairly steady demand during a recession.” Taking into account that the cannabis industry is still relatively young, it’s hard to know whether it is indeed recession-proof, Motsenbocker said. “We do think consumers will be less likely to try new products and stay with brands they know, like and trust (and also) offer great value for their dollar,” he said. In response, cannabis consumers could purchase more bargain-priced products and take fewer chances on their selections, according to Skip Motsenbocker, CEO of Pacific Stone, a cannabis cultivator based in Carpinteria, California. Like cannabis companies, marijuana consumers are feeling the pinch of rising costs by way of gas and food prices, among other inflationary pressures. Jordan Lams, chief executive officer at Moxie, a vertically integrated cannabis company based in Long Beach, California, said the lack of momentum for marijuana reform at the federal level is making it harder for companies to find capital.Ĭouple that with falling prices and increased costs stemming from inflation, and “it’s probably one of the more challenging seasons the industry has seen,” he said. “That’s a baseline expectation,” he added. Mancheril expects that most companies in mature markets won’t have a banner year but should be able to slog through and survive until the end of 2023 or 2024. George Mancheril, CEO of Bespoke Financial, a Los Angeles commercial lender that works with cannabis companies, said marijuana stands out as one of the only industries where businesses are experiencing deflation. “Every state is its own story, with a different regulatory structure,” said Kevin Bush, chief financial officer for Denver-based Sweet Leaf Madison Capital. Industry officials said marijuana companies in those states are better positioned to weather a downturn than operators in more mature markets such as Colorado, Oregon and Washington state.Ĭannabis businesses in those states face overproduction, falling wholesale prices and stiff competition.Īs a result, a recession could play out differently depending on the state cannabis market. Newer state markets with limited licenses – think Florida, Illinois, Massachusetts, New Jersey and New York – commonly experience relatively higher wholesale cannabis prices and a less competitive landscape.

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McClintock and two other conservative co-sponsors, introduced a bill to legalize and regulate cannabis.Ĭlick here to read the full article in Yale Law & Policy Review Inter Alia.The industry emerged relatively unscathed by the recession.Ĭannabis industry executives point to rising inflation – which tends to curb consumer purchases – as well as the lack of progress in Washington DC for federal marijuana reform. More recently, Republican Representative Nancy Mace, joined by Rep. Senate Majority Leader Chuck Schumer, Senator Cory Booker, and Senator Ron Wyden released a discussion draft of their own version of a de-scheduling bill over the summer (the Cannabis Administration and Opportunity Act) and will likely promote that bill in the coming months. It is probable that the bill’s lead sponsor, Chairman Jerry Nadler, will seek to bring the bill to the House floor in the coming months.

On September 30, 2021, the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) passed through the House Judiciary Committee by a vote of 26-15, with two Republicans crossing party lines (Reps. However, the DCC is poised to soon rise in prominence, and lawyers, lawmakers, regulators, and businesses should pay close attention as the doctrine has the potential to bedevil the emerging cannabis sector.Ĭongress is contemplating a national cannabis marketplace, ushering in the interstate commerce of cannabis. Vaguely recalled by practicing attorneys, the Dormant Commerce Clause (DCC) is often the bane of first-year students’ Constitutional Law courses. Statement Against Anti-Asian Racism and Hate

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