With the news that the Dutchie founding brothers, Ross and Zack Lipson, have been relieved of their duties at Dutchie, more bad news comes rolling into the cannabis industry as Weedmaps, the industry online leader is traffic and sales leads, is laying off another 25% of their workforce under their new CEO. For those counting, Weedmaps has dropped 1/3 of their workforce in the past few months, and they make TONS of money. Their margins are over 90% on earnings and revenue, and yet, they still succumb to the massive collapse effecting the cannabis industry. Weedmaps did disclose recently they have over 500 non-paying clients, which leads one to wonder how bad it is with flower selling businesses when they can’t afford their Weedmaps monthy subscription.
Throw in MSOs like Curaleaf are laying off people, and you know whether you touch the flower, drive traffic, or help take orders and run POS systems, there is nowhere to hide from the bloodbath effecting the marijuana industry.
When does it end?
Full legalization will be very painful, but the last drop of blood has to be bleed out of the excess and greed in the industry. With full legalization comes interstate commerce. That will finally bring a national, tradeable, trackable market that is efficient and establishes foundational prices for cannabis in America. Margins will get crushed in one last brutal blow as over-supplied states flood under-supplied states with product. You may be hearing whispers about interstate commerce and the Dormant Commerce Clause, but that could be years away and a long court battle to the Supreme Court.
That will be ground zero.
National legalization will also correct the albatross known as IRS code 280e.
You get those two events, you get a rational, efficient market.
Until then, expect more blood in the streets.
MARIJUANA INDUSTRY LAYOFFS, READ ON…
