Going Green, Not All Marijuana Business Models Are Equal
Providing a quick statistical snapshot of the fast growing marijuana industry within the US, Marijuana Business Daily reported in its 2016 Marijuana Business Factbook; a majority all marijuana-related businesses – think cultivators, dispensaries, collectives, and the ever popular brick-and-mortar recreational pot shops – reported they were able to “Break-Even” or were “Modestly Profitable,” during the first part of 2016.
As the fast-paced and cyclical business cycle of our country continues to force out prehistoric industries, pushing them to their extinction, 18 percent of all medical marijuana dispensaries from coast-to-coast reported being “Very Profitable”, with 41% reporting being “Modestly Profitable.” The remaining 29 percent demonstrated that just because you own a state-sanctioned pot shop, it’s still a high probability you will only “Break Even,” provided you don’t have the best strains and knowledgeable budtenders.
Image courtesy of Marijuana Business Daily
Growing Green
For those in the cultivation game, the statistics looked particularly Kushy. Cultivators with a green thumb and a good distribution network were generally able to recapture their initial investment after just one successful harvest.
91 percent — that’s as sweet as it gets from a profitability standpoint. Additionally, the report noted that 37 percent of all producers of cannabis-infused edibles claimed to have broken even so far during 2016, and 27 percent of the surveyed cannabis companies boldly proclaimed they were, “Very Profitable.”
While the above statistics are well and good for the dispensary owners, edible manufacturers, or wholesale cultivators, the well-worn path to success in the marijuana industry is slightly less stoney for many auxiliary businesses models. Per Marijuana Business Daily’s Analysis, “26 percent are losing some or a lot of money – the most by far of any sector. Many of these companies must shell out a lot of money to get started and face very strong competition, making the runway to profitability much longer.”
Compared to dispensaries and cultivation warehouses, Dot-com companies are lagging in their overall profitability in marijuana’s high-tech sector; struggling thanks to the industry’s rapidly budding competition.
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