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MJBiz Daily

Cannabis growers exit California market, helping stabilize prices


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January 26, 2023

OSS CEO, Scott Solomon, spoke with MJ Biz Daily about the state of the California market

California cannabis cultivation capacity is down significantly from early 2022, with some growers choosing not to plant or renew their licenses because of low wholesale prices and tough economic conditions.

The reduction in canopy is leading to wholesale price stabilization – and might even result in a slight increase in pricing – following months of declining prices in the nation’s largest marijuana market, according to some industry officials.

Seeing stability

Some of Scott Solomon’s cultivation clients were reporting a bleak scene about 18 months ago, but the situation is improving.

The CEO at Operational Security Solutions, headquartered in Fresno, said prices started dropping “pretty hard” about a year and a half ago.

“We have a revenue model that’s based off of the volume of cash that these businesses are generating,” Solomon said. “It impacted us significantly.

“In some instances, we had clients, cannabis businesses, that said the price dropped essentially 80% across some of their products.”

According to Solomon, the pricing picture started to improve somewhat last September and has begun leveling out.

Still, businesses are building out more cultivation capacity on the potential of future growth of the industry in event of federal legalization or other reform, he said.

Solomon’s seeing more grows developing from Fresno down through Bakersfield and toward Los Angeles.

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