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Adam JacksonAugust 9, 2022


The word “inflation” has dominated headlines and earnings calls this year, and a survey from a leading national cannabis accounting and advisory firm solicited feedback to gauge how such rising costs are affecting the sector.

In a month-long survey this year asking operators a series of questions regarding the impacts of inflation on their cannabis operation, GreenGrowth CPAs found that one in four operators reported planning to raise prices in the near or immediate future to combat rising inflation costs.

Based on its findings, the firm believes customers could see as much as a 10% price increase on retail purchases.

Out of the respondents who participated in the inaugural Cannabis CFO Survey, more than 50% believe the cannabis business environment has declined in the last 12 months.

“The cannabis business landscape is ever-changing,” GreenGrowth Founder & CEO Derek Davis said. “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. 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.”

Last year, GreenGrowth CPAs’ findings showed a 76.6% positive or very positive assessment of the current cannabis business environment. This year, only 44% of cannabis leaders reported a positive or very positive assessment of the current business environment — a decrease of more than 30% in the past year.

GreenGrowth CPAs found last year that more than 70% of operators saw some or significant improvements in the cannabis business environment. According to this year’s data, 50% of operators reported some or significant decline in the cannabis business environment in the last 12 months.

In last year’s data set, the firm found that more than 70% of respondents who reported some or significant decline in the cannabis business environment were in western states. The firm’s updated survey showed a similar stance, with 66% of respondents claiming some or significant decline in the cannabis business environment across the west. Only 16% of operators east of the Mississippi rated the business environment in a decline.

Almost two-thirds — 70% — of operators intend to absorb the additional costs and “ride it out” before increasing costs to their customers, versus the other 30% of retailers who reported plans to increase prices to combat rising inflation costs.

The Blame Game

GreenGrowth CPAs allowed respondents to rattle off as many contributing factors they blame for the rising inflation issues currently impacting the economy, “since there are generally various reasons contributing to rising inflation and economic downturns.”

According to last year’s data set, the top two reported issues facing operators were supply chain snarls and difficulty hiring labor.

This year, the difficulties and shortcomings are being attributed to “the challenging political landscape” between “the impacts” of the Biden Administration and the “lingering effects” from the Trump Administration — in addition to supply chain challenges.

In the survey, over 40% blame the Biden Administration for the current inflation issues while more than 30% still blame the Trump Administration.

More than 20% blamed foreign influences such as Russia, China and the full-scale proxy war in Ukraine for rising inflation. Elevated energy prices continue to eat at company margins and consumers’ wallets, too, with nearly 20% of respondents blaming petroleum companies for costs associated with rising inflation — especially as oil giants continue to report raking in record profits this year.

However, supply chain issues take the cake — with more than 40% of respondents attributing rising costs to supply chain challenges.

How sticky?

While cannabis CFOs are indicating to the firm that they plan on raising prices by at least 10% this year, BDSA analyst Andy Seeger does not believe such a move necessarily reflects the limited pricing power operators currently wield.

While price compression “is happening almost everywhere,” the degree to which operators try to squeeze out margins through passing along costs differs among markets. In a saturated legacy market such as California, prices have dropped 25-30% in a year. Other legacy markets such as Colorado, Oregon, and Washington are seeing prices fall as well. Prices in Illinois are still elevated, though.

“I don’t really see cannabis rising as an economic good,” Seeger said in an interview. “The consumers are still price searching. Everything’s still coming down. Rising in price would kind of go against a lot of that movement.”

Consumers in the nascent industry are also still curious, he said, as falling prices have given those the chance to try a range of products rather than establish brand loyalty.

“Blue Dream is not always going to be on the shelf like a Bud Light,” he said. “It’s harder to maintain that consistent shelf set in cannabis, so there’s this constant churn. And because consumers are already highly promiscuous, there’s this idea that the stoners are just trying everything for the first time.”

This is the first time legalized cannabis has faced a recessionary downturn. If it can weather the storm has yet to be seen. Companies have been eating their own margins, and many have pivoted toward crisis mode as a lack of regulatory action and a tightening landscape threatens the sector.

“Is it a sticky good such as beer?” he added. “It’s one of the last ones you put down if you’ve been laid off and one of the first ones you pick up when times get better again. We’re not sure if cannabis is as sticky as alcohol.

People have ingrained alcohol into their daily and natural habitual uses. Cannabis is not as normative. It’s not as ingrained or integrated into consumers life choices yet, except for maybe some who are heavy stoners. So, it might be a little bit easier to put down for the average consumer.”

William SimpsonJuly 17, 2018


With President Trump signaling his likely support for the bipartisan Congressional effort to ease the U.S. ban on cannabis in legal markets, the country as a whole could benefit immensely.

By giving states the rights to determine the best course with cannabis, business valuations could go through the roof. For example, under the current laws, Golden Leaf Holdings, a cannabis company with cultivation, production, and retail operations that is publicly traded in Canada, is unable to be publicly traded on the Nasdaq. Conversely, Canadian cannabis companies are already allowed on the Nasdaq, giving them a significant advantage in the globally booming market.

The most significant progress for businesses would come with the easing of Internal Revenue Code 280E, which has, by and large, blocked cannabis businesses from tax deductions, credits and banking in general. The passing of this bill would be a tremendous step for states with legalized markets. American cannabis entities struggle daily to make retail an efficient platform, while barely breaking even under the current regulations. The Treasury Department demanding money from a market they deem illegal needs to end.

Most significantly, ending the federal ban could represent a step in the right direction towards addressing systemic criminal justice issues that unjustly target minorities, which is far more important than any business-related outcome.

This measure is far from a single, fix-all solution. Even if the bill became law tomorrow, businesses wouldn’t be able to reap the benefits right away. If cannabis remains a Schedule 1 narcotic, banks will continue to be hesitant to opening accounts for businesses. The same goes for standard business practices like shipping across state lines.

Furthermore, nothing federally-approved changes local and state laws. This means issues stemming from occupancy, zoning, packaging and other regulations will still loom over businesses. Too many voices in cannabis could leave the industry at the whim of political agendas and powerful competitor lobbies, including tobacco, alcohol and pharma.

While the bipartisan bill does provide the U.S. a step in the right direction for both the cannabis industry and its citizens, we must remember that it still is just one incremental step in the process. Plenty of work is left to be done on federal, state and local levels to revise regulations for businesses and citizens in states with legal markets. That said, the possible passing of the bill should be championed for the huge victory it would represent. With hope, it would be far from the last one to come.


William SumnerJune 8, 2018


The prospect of legalized cannabis in North America just got a little bit brighter. On June 7, 2018, the Senate voted to approve Bill C-45, a measure legalizing recreational cannabis in Canada. The measure will now go to the House of Commons for a final vote.

If approved, the potential financial effect could be tremendous. A recent report released by Stifel Financial estimated “a total medical market opportunity of $1.3 billion CAD and a recreational opportunity of $8 billion CAD (retail sales).” Additionally, the report found that the wholesale market opportunity for licensed producers could reach as high as $5 billion CAD.

With the majority of the House controlled by Prime Minister Justin Trudeau’s Liberal Party, which successfully campaigned on cannabis legalization in 2015, the odds of Bill C-45 passing are quite high. However several amendments to the measure made by the Senate, such as allowing provinces to ban personal cultivation, could slow down the legislative process.

Speaking with The Toronto Star, Health Minister Ginette Petitpas Taylor said that once passed, it would take upwards of two to three months to implement the new law.

In the United States, President Donald Trump stated that he would most likely support a bipartisan bill, introduced by Massachusetts Sen. Elizabeth Warren and Colorado Sen. Cory Gardner, that would essentially end the federal war on cannabis.

“I support Sen. Gardner. I know exactly what he’s doing; we’re looking at it. But I probably will end up supporting that, yes,” Trump told reporters, as quoted by NPR.

Under the proposed legislation, the Controlled Substances Act would be amended to allow states to write their own cannabis laws without fear of federal interference. The apparent support offered by President Trump breaks with the position of his Attorney General, Jeff Session, who has been an ardent opponent of legalized cannabis and most recently rescinded the long-standing Cole Memo; which was put in place by then-President Barack Obama.

Debra BorchardtApril 13, 2018


The Washington Post reported Friday that “President Donald Trump has promised a top Senate Republican that he will support congressional efforts to protect states that have legalized marijuana.” Senator Cory Gardner has been stalling on approving nominations for Justice Department positions as he held firm on the states rights issue for legalization.

According to the story, Trump told Gardner over the phone that he would not go after states that had legalized marijuana and as a result, Gardner is softening his stance on DOJ nominations.

“President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all,” said Sen. Cory Gardner (R-CO), according to the Washing Post. “My colleagues and I are continuing to work diligently on a bipartisan legislative solution that can pass Congress and head to the President’s desk to deliver on his campaign position.

The co-directors of the 2012 Amendment 64 campaign that legalized marijuana for adults in Colorado, Mason Tvert and Brian Vicente, have issued statements in response to the news.

Statement from Mason Tvert, who co-directed the Amendment 64 campaign and serves as vice president of communications at VS Strategies, a Denver-based public affairs firm that specializes in the cannabis industry:

“We are grateful to Sen. Gardner for standing up for the people of Colorado, as well as to President Trump for respecting states’ rights to adopt their own cannabis policies.  Colorado has taken great strides toward replacing the illegal marijuana market with a responsibly regulated system. It has been a long and difficult process, but we may now be seeing the light at the end of the tunnel. This is one more step toward ending the irrational policy of marijuana prohibition, not only in Colorado, but throughout the country.”

Statement from Brian Vicente, who co-directed the Amendment 64 campaign and is a founding partner of Vicente Sederberg LLC, one of the nation’s leading law firms specializing in cannabis law and policy:

“We see today’s announcement as an endorsement of the work we have been doing in Colorado for the past decade. From the birth of our regulated medical marijuana market in 2010 to the opening of the adult-use market in 2014, we have sought to be the model for responsible cannabis regulation. We are incredibly proud that Sen. Gardner was able to represent not just our state, but our industry in his discussions with the president. This is a great day for everyone in Colorado and around the country who risked their personal freedom to shape the regulated cannabis market.”

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