Who is to blame for the current inflation rates plaguing United States cannabis businesses? According to respondents from a new survey, rising inflation rates can be attributed to the Biden Administration, petroleum companies and various other factors.
On Monday, GreenGrowth CPAs released the results of its 2022 Inflation Impacts Survey.
The accounting and advisory firm made some thought-provoking discoveries through its research, including data showing that one out of four dispensary operators planned on raising their prices to combat inflation in the immediate or near future.
Photo via GreenGrowth
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GreenGrowth Certified Public Accountants (CPAs) is an accounting and advisory firm founded in 2016. The company states that its mission is to assist cannabis companies with tax and business strategies. The organization has a YouTube channel with approximately 14,000 followers dedicated to providing business knowledge to pot industry operators.
Despite various contemporary studies and data showcasing the growth of the legal cannabis industry in recent days, more than 50 per cent of respondents who took part in this new survey feel that the cannabis business environment has declined over the past year. This marks a significant shift from 2021 when 70 per cent of participants reported a significant improvement in that environment.
“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. But it isn’t all bad news. Many operators benefited from a surge of demand and used this new windfall to enact ambitious growth plans. Others, however, are seeing a declining business environment and raising prices to combat rising inflation costs impacting their margins and business performance.” – GreenGrowth
According to GreenGrowth, 70 per cent of operators plan to absorb the additional costs associated with inflation before rising prices for customers and 30 per cent plan on increasing the costs of their goods to compensate for that negative economic trend. Reports from the company indicate that customers could see as much as a 10 per cent increase in prices from operators who plan on rising costs.
GreenGrowth also outlines that the positive outlook on the cannabis business environment has had a steady decline since last year, and according to company data the 2022 Chief Financial Officer (CFO) Survey showed a 30 per cent decline in the rate of positive/very positive assessments from cannabis leaders since the 2021 survey was conducted.
Additionally, 40 per cent of survey respondents blamed the Biden Administration for current inflation issues, 30 per cent blame lingering effects from the Trump Administration, 20 per cent blamed foreign influences such as the conflict in Ukraine and several others blamed supply chain issues and petroleum companies.
“The cannabis business landscape is ever-changing. And, in order to provide accurate financial data to our clients, we have to consider the economic impacts of rising inflation costs, as well as other factors that can impact the business performance of cannabis companies,” said GreenGrowth Founder & CEO, Derek Davis.
“Through surveying our customers and cannabis operators in general, we’re able to compile enough data to provide a detailed analysis of how cannabis operators are feeling the economic pressures of today,” added Davis.
