| Navigating industry headwinds, Curaleaf identified three legacy markets that were no longer rowing its ship in the right direction.
The East Coast-based multistate operator made the executive decision last week to cut and run from California, Colorado, Oregon. The company announced Jan. 26 the closure of the majority of its operations in those states—bailing on its production and cultivation facilities—as part of a continued effort to “streamline its business.”
Before the exit announcement, Curaleaf’s U.S. footprint included operations in 21 states with 147 dispensaries, 29 cultivation sites and nearly 6,000 team members. Concurrent with the closures, the company announced it reduced its payroll by 10%, meaning a large chunk of those 6,000 workers are no longer employed.
Curaleaf officials called the triple-state exodus necessary for the future of the company, elaborating that the decision was “made as a result of recent legislative decisions, price compression, and lack of enforcement of the illicit market.” They're not alone in this quagmire.
Specifically in Oregon, roughly 275 licensed wholesalers are up against average flower prices that dipped to an all-time low of $550 per pound in December, a 42% decrease from the beginning of 2022, according to the state’s Liquor & Cannabis Commission. In a similar boat, Colorado’s average wholesale market rate for a pound of cannabis flower was an all-time low of $658 per pound as of Jan. 1, more than a 30% dip from a year ago, according to the state’s Department of Revenue.
As far as retail sales go, California’s $5-billion-plus market remains the largest on the planet. But the state has fewer than three dispensaries per 100,000 people, one of the lowest rates in the nation. While California did away with its cultivation tax in 2022, the whack-a-mole game for law enforcement agencies attempting to eradicate illicit operators continued throughout much of the year.
But as more licensed operators have exited the California market, the supply has decreased roughly 17% since the first quarter of 2022 in terms of cultivation canopy—from 82 million square feet to 68 million. And with a less crowded space, prices are perhaps starting to stabilize.
-Tony Lange, Associate Editor | 
