Inflation Raises Marijuana Prices

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There may soon be a significant shift that may necessitate a change in user habits. However, some people may soon feel the full force of inflation’s effects, which have already derailed the plans of many for a cross-country road trip this summer.

Cannabis and its ancillary products have, thus far, avoided the kind of double-digit increases seen in many food products like chicken and avocados.

According to one analytics firm, the price of marijuana flowers, edibles, and vaping products fell by 16.7 per cent, 11.8 per cent, and 12.4 per cent, respectively, between January 2021 and 2022.

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But for various interconnected causes, such as a shortage of available materials and disruptions in the supply chain, prices have been continuously rising at a rate unseen in 40 years.

Almost every sector has been hit by the rising cost of packaging materials, even if the price of the main product has remained unchanged.

The CPI increased by 9.1 per cent between June 2021 and June 2022.

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Moreover, as the most recent study from GreenGrowth CPAs, an accounting firm specializing in the cannabis sector, indicates, inflation may have finally begun to hit the cannabis industry.

As the price of labour and materials used in the production of ready-to-consume cannabis continues to rise, one in four shops has already raised or announced plans to raise prices by more than 10% in the next year.

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According to research on the cannabis industry, “The COVID-19 pandemic had a comparatively limited impact on cannabis operators” by the COVID-19 pandemic.

“In 2021, supply chain problems and difficulties in hiring were the most often reported problems across all industries. In addition, supply difficulties are by far the most common difficulty operators face today.”

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Respondents were divided as to who was to blame for rising inflation; 40% blamed Biden administration initiatives, and 30% blamed Trump administration measures that had carried over.

Operators also cite problems with supply chains, tensions with countries like Russia and China, and the influence of petroleum firms’ business practices as contributing factors.

Since cannabis usage and manufacturing are now prohibited on a federal level, national statistics rarely provide a complete picture. Rising costs have not stopped demand, which has been robust throughout and after the COVID-19 epidemic.

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After the quarantine began in California, several businesses that distribute goods online saw a 500% increase in business. According to the paper, “After two years marked by crisis and uncertainty following a global pandemic, financial operators in cannabis find themselves navigating a list of new complications and business obstacles,”

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“Not everything has been horrible, though. As a result of the uptick in demand, many businesses were able to increase their operations significantly.” More than 700 businesses in states where marijuana is allowed for medicinal or recreational use were analyzed for this report.

Startups and established companies with operations in multiple states are included. Seventy per cent of business owners said they would try to eat the cost of inflation rather than raise prices, but 30 per cent said they would do so to guard against losses.

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