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CULTIVATION SNAPSHOT:

U.S. WHOLESALE MARIJUANA PRICES AND SUPPLY

Welcome to the first edition of the Cultivation Snapshot: U.S. Wholesale Marijuana Prices and Supply produced by the research team at Marijuana Business Daily.

Wholesale cannabis prices and supply can vary widely state to state, which shouldn’t come as a surprise to any savvy cannabis industry watcher. Each state regulatory body reinvented its own wheel when coming up with rules, and every cultivation and retail climate is unique, as well.

But there are similarities to be explored when comparing markets. For instance, the more mature programs, such as Washington and Colorado, have experienced steady declines in prices for wholesale cannabis ower.

Those like Oregon with long-entrenched black markets and plentiful outdoor farms suffer from oversupply, driving prices down. Contrast that with relatively new programs, such as Nevada and Alaska, which are reporting strong wholesale markets – for the time being.

Then there’s California, which is its own ever-changing, massively complicated behemoth. This report provides information on and analysis of the wholesale cannabis supply and price situation in:

• Alaska
• Nevada
• Washington state
• California
• Oregon
•  Colorado
• Medical marijuana markets (in summary)

On the national level, wholesale cannabis prices have steadily slid downward since last year, from more than $1,600 a pound to just over $1,300 a pound, according to Cannabis Benchmarks, which gathers wholesale spot pricing data for the marijuana industry. Prices tend to dip most in the fall, when outdoor cannabis harvests are good the market, pushing supply up. As more businesses are licensed and cultivators build out their facilities and become more efficient, this trend line is likely to continue on the same downward trajectory.

The information in this report is derived from dozens of interviews with growers and retailers in the above mentioned markets. Hard data is difficult to obtain in today’s federally illegal cannabis industry, making the most reliable source the men and women in the field. The data presented are ranges, not averages, of what the markets are experiencing.

Where available, we provide a year-over-year comparison of prices. This data was not available in for states where the recreational market began in the last year.

If you have any questions or want to provide feedback, please email barts@mjbizdaily.com.

 

This is a snapshot of the report written by Bart Schaneman 
from the MJ Biz Daily Cultivation reporter, originally published in summer of 2018.  You can learn more at https://www.mjbizdaily.com

On Friday, the U.S. House of Representatives voted overwhelmingly to reject a proposed amendment to the Agriculture and Nutrition Act of 2018, also known as “Farm Bill” that would, among other changes, repeal the Rural Energy for America Program (REAP).

This is such a good article, published by MJ Biz Daily, written by Jeff Smith. In my mind there is significance here…you can see that there is bipartisan support on the federal level for protection of state run medical marijuana programs. That’s big. It means that even though the federal government and some of the current leadership within it are opponents to medical marijuana (Attorney General Jeff Sessions) there are others that support it. I find the fact that this issue may be one of the few issues that they are coming together in support of even more interesting. It’s momentum in the right direction hopefully we can get both sides of the aisle to work on other issues together as well!

In a historic maneuver that signifies growing support in Washington DC for medical marijuana, a key congressional committee voted Thursday to continue to protect lawful state MMJ programs from federal interference or prosecution.

The House Appropriations Committee approved, by a bipartisan voice vote, an amendment by Rep. David Joyce, an Ohio Republican and former prosecutor, to attach the medical marijuana protections to the FY2019 Commerce, Justice and Science appropriations bill.

The provision – previously called the Rohrabacher-Blumenauer Amendment and, before that, Rohrabacher-Farr – prohibits the Justice Department from using funds to interfere with state medical marijuana programs or to prosecute MMJ businesses compliant with those state laws.

This is the first time the measure has been added to the appropriations bill in committee, all but ensuring it will go to the full House for a vote.

The amendment doesn’t offer any protections for legal state recreational marijuana programs.

NORML called Thursday’s development “historic,” while the Marijuana Policy Project (MPP) declared that momentum is building behind marijuana reform at the federal level.

“This is just the latest sign that support for marijuana policy reform is growing in Congress, and we’re seeing that support on both sides of the aisle,” MPP’s Don Murphy said in a statement.

“Republicans are joining with Democrats to protect compassionate state medical marijuana programs from federal interference.”

Congress listening to America?

Murphy, MPP’s director of conservative outreach, said congressional support mirrors public opinion.

A recent poll by Quinnipiac University found that 93% of voters support medical marijuana and nearly three in four support protecting states with legal cannabis programs from federal prosecution.

Murphy said the fact the committee used a voice vote may indicate that opponents don’t want to be seen as voting against “sick patients and states’ rights.”

Although the provision to block the DOJ from cracking down on lawful state MMJ programs has been in effect since 2014, there is often a struggle to get the measure renewed because it has passed only as an amendment to the federal budget instead of as a stand-alone, permanent law.

Last year, House Rules Committee chair Pete Sessions, a Texas Republican, blocked the amendment from receiving a floor vote. Proponents generally have had to scratch and claw for extensions of three months to a year.

The current law, approved in March, expires at the end of September. It must be reapproved by Congress in some form to maintain federal protections for MMJ companies against potential prosecution or interference by federal authorities.

Amendment ‘99% solid’

Rob Kampia, executive director of the Marijuana Leadership Campaign and former executive director of MPP, predicted the amendment most likely will go to the House floor as is. He believes the measure is “99% solid” to be extended for the new fiscal year from Oct. 1, 2018, through Sept. 30, 2019.

But as a matter of legislative process, Kampia said, the House Rules Committee still could strip the amendment out of the bill by a 9-4 (or greater) vote or bring a competing amendment to the floor.

Meanwhile, advocates noted, a similar amendment, introduced by Reps. Tom McClintock, R-California, and Jared Polis, D-Colorado, to protect state adult-use programs has failed several times to advance out of the House Rules Committee.

A number of other bills to reform federal marijuana policy have been or are expected to be introduced, but some experts are skeptical Congress will take action before the November midterm elections.

In a tweet, U.S. Rep. Earl Blumenauer – an Oregon Democrat and longtime cannabis advocate – lauded Thursday’s development.

But, he added, “MMJ protections alone are not enough. We need to expand to adult use.”

This article was originally published on May 17, 2018 by Jeff Smith of MJ Biz Daily 

Jeff can be reached at jeffs@mjbizdaily.com

Understanding Taxation is an integral component of running a successful business. The cannabis industry is no different. Looking to learn? There is an upcoming webinar from Cannabis Business Executive that is an excellent source of information for growers in Maryland. Register today at

https://register.gotowebinar.com/register/8568320782937129473

Historically, tax laws have been a weapon used against the cannabusiness industry.  The December 2017 tax act has changed the tax environment, affecting every taxpayer.  Many of the cornerstone issues were added or changed in the last days before the passage of the legislation. The IRS and state administrators are evaluating the effects of these additions and changes.  This presentation will highlight areas that both benefit and hurt cannabusiness taxpayers.

Angelo Poletis, CPA
Principal, SC&H Audit & Tax Advisory Services

As a principal with SC&H Audit & Tax Advisory Services, Angelo assists clients with complex federal and state income tax issues. Angelo focuses on middle and large market clients, where he provides planning and compliance experience to create tax efficient structures. With specific knowledge of the complex tax regulations facing cannabusinesses Angelo specializes in serving these companies and planning around the unique tax and business issues they face. Angelo is experienced in providing tax planning for clients in various industries at both the entity level and for the equity-owner. His knowledge of U.S. income tax issues, including entity structure and accounting methods, for pass-through entities continues to be of great value to clients.

Stephen Bishop, CPA
Senior Manager, SC&H Audit & Tax Advisory Services

A senior manager with SC&H Group and a member of the SC&H Group Medical Cannabis Advisory Services. Stephen has experience serving emerging companies and a deep insight into the taxation of cannabusinesses. Stephen has presented several webinars and has been guest speaker at numerous events focusing on the medical cannabis industry including IRC Section 280E and planning with regards to multiple lines of businesses. His areas of expertise beyond cannabis include Partnership and S-Corp taxation with a focus on the real estate industry where he provides planning and compliance experience, and consults on creating tax efficient structures for his clients.

This is a great step forward economically for Arizona agriculture. At first glance this looks to be a very good bill for farmers. Hemp as an industrial plant has multiple facets of uses and can be an economic injection into our local economy. Good job Arizona, now our next step is to ensure that we adopt agricultural practices that are sustainable as possible limiting water & chemical inputs so we do not erode our environment.

Here is the article as published by the Phoenix New Times Magazine.

http://www.phoenixnewtimes.com/news/arizona-hemp-industry-ready-to-take-off-if-governor-ducey-signs-bill-10406679