California cannabis sales.
The pricing trend pressures continue in California. The average unit price in CA for the month of November was down 1.4% sequentially and is down 7.9% YoY. It hit the $23 number for the first time in California market history. Sales came in at ~400M for the month of November, which was down 3.3% sequentially and down 7.9% YoY, meaning the unit volumes sold have been flat YoY. This market is really struggling and it shows when you hear tidbits that only 70% of the cultivators renewed their licenses for 2023. This industry is hurting and they need to figure out how to stop the decline in price throughout the industry.
A big hit to the industry.
If you have never walked into a dispensary before, you probably didn't realize that you aren't allowed to use a credit card because the banking system in the United States is regulated by the federal government and cannabis is federally illegal. For the past few years, dispensaries across the U.S. have found a workaround by allowing their customers to use a debit card. They were allowed to do this because they would process the purchases as an ATM transaction where the dispensary would actually hand you back a couple of dollars to cover the ATM fee. This type of way of purchasing cannabis accounted for roughly 25% of all sales. Now the system is faltering because some of the largest processors of ATM transactions, such as NCR’s Columbus Data Services, have turned off the ability of processors to use their service, according to three people familiar with the issue, who asked not to be named discussing private information. This has caused mass outages throughout the industry. It doesn't sound to me that this grey area in banking will come back in favor of the cannabis industry any time soon. This is just another example of why this industry needs SAFE Banking to pass ASAP.
Good ole Canopy.
Canopy Growth Corporation (CGC) announced today that their CEO, David Klein, and other members of Canopy will be ringing the opening bell at the Nasdaq today. "We are proud to be a Nasdaq-listed company, and our team is honored to be ringing the opening bell. This is an exciting time for Canopy Growth as we take important steps to realize our goal of building a leading North American cannabis company. We appreciate the continued support of all of our stakeholders as we take ambitious strides towards unleashing the power of cannabis," stated Klein.
