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  • Marc Hauser

Cannabis Musings - March 9, 2023

Friends – one of the podcasts I regularly consume to understand financial markets, economic trends, and industrial systems is Bloomberg’s Odd Lots. They exude giddy curiosity about arcane structures within our financial system and economy, deconstructing like a French philosopher, but without the political or sociological biases that bug me about economics generally.

Today’s Odd Lots podcast featured Samuel Rines, Managing Director at Corbu, LLC. I highly recommend you listen to the podcast yourself (and, if you’re a Bloomberg subscriber, there’s a related article posted as well), but the gist of it is that there’s a visible trend of large corporations using headlines about supply chain and market disruptions, as well as consumers generally enjoying higher wages as of late, to raise prices and boost margins. This, naturally, doesn’t help the Fed’s efforts to help bring down inflation.

This got me thinking about how the cannabis industry is moving in the other direction and hasn’t been able to take advantage of this situation. Indeed, we’re seeing gross margins (basically, gross profits divided by revenues) contract and prices (both wholesale and retail) declineacrosstheboard. Costs also play into margin calculations, and clearly retailers (on a macro level) haven’t been able to fully capitalize on plummeting wholesale prices to offset prevailing trends.

There’s certainly more underlying this dynamic than I’ll ever be able to understand, and I admit that I don’t have ready access to the right kinds of data to properly back up my thesis, but I suspect that there’s generally a concern that cannabis customers are more price-sensitive than other consumers, particularly when growth has slowed in legacy states and there’s an illicit market that’s already materially cheaper and somewhat readily available (which we discussed earlier this week).

I’m not smart enough to know whether it’s actually true, but I do wonder whether the average retail customer buying at licensed outlets really would be that eager to shift to illicit sources that can’t offer the same variety, testing, or safety. It also seems like a good reason for the industry to find ways to materially expand its consumer base beyond the stagnating core.

This is all another good example of how everything about cannabis is different. I counsel clients and contacts all the time about how what works in just about every other industry or market almost certainly won’t work in cannabis. Anyone who thinks or expects differently – a glick ahf dir!

Be seeing you!


Hauser Advisory provides advice and strategy on business lifecycle events and cannabis industry navigation, tapping into a deep, national network,

and twenty-five years of dealmaking and capital markets experience.

© 2023 Marc Hauser and Hauser Advisory. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form. Subscribe to Cannabis Musings at

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