Cannabis retailers in Connecticut say they are running out of product to sell because of a lack of licensed growers in the state’s nascent legal cannabis industry.
Supply issues surfaced last year as retail growth in neighboring New York state slowed and New York producers struggled with a counter-supply glut.
Both problems seem easy to solve by transporting the product across state lines and several miles away. But that would violate federal drug laws. That leaves each state that legalizes marijuana with its own process for licensing growers and sellers, trying to balance the two within state borders.
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Benjamin Zacks, chief operating officer of Fine Fettle Co., which operates five dispensaries in Connecticut, said the lack of supply at stores has caused some customers to return to their original illegal dealers or to buy products across state lines. He said he was concerned that people may no longer be able to obtain such products.
When recreational sales became legal in Connecticut in January 2023, there were seven dispensaries and four manufacturers in the state, he said.
“One year later, we have 26 dispensaries open and only one grower, grower, grower left,” Zacks said. “It’s a micro-tiller, so the additional canopy is only about 5,000 square feet.”
A flag decorated with marijuana leaves is seen outside the Connecticut State Capitol on April 20, 2021 in Hartford, Connecticut. Cannabis retailers in Connecticut are facing shortages, and growers in New York are struggling to sell all their inventory. (AP Photo/Jessica Hill, File)
The Connecticut Department of Consumer Protection, which regulates the industry, said there appears to be a temporary hiccup in getting new licenses for producers through the pipeline. According to the department, 11 small-space cultivators and five micro-cultivators have obtained provisional licenses and are moving toward final licenses.
“As a new agricultural industry, there are natural fluctuations in supply and demand,” said department spokeswoman Caitlin Klassert. “Increased demand during the holiday season, from Thanksgiving to New Year’s, exacerbated the low assortment.Retailers experienced significant congestion associated with the holiday season, but December data shows Our record sales are proof of that.”
Meanwhile, New York state is recovering from the exact opposite problem it faced in developing its legal cannabis market.
Lawsuits and bureaucratic issues significantly delayed the opening of state-licensed dispensaries last year. As a result, the first wave of pot farmers were unable to sell much of their fall 2022 harvest because there were too few stores to sell what they grew. Farmers faced financial hardship as sales income decreased.
New York state has belatedly accelerated the pace of retail openings, listing 61 adult-use pharmacies to open across the state on Monday. Farmers claim that the crisis has eased to some extent.
Gail Hepworth, who runs Hepworth Farms with her sister in the Hudson Valley, said: “Over the last month, we’ve seen more dispensaries open and things are getting better. So we’re seeing momentum to ease what has been a very painful situation. “It’s starting to get worse,” he said.
A check of stores in New York and Connecticut this week confirmed similar pricing, with 3.5 grams of flower selling for $50 to $75 in each state.
Still, the irony of two very different supply chain problems hitting neighboring states is not lost on farmers.
“It’s totally different than other markets, right? Because you have to silo everything within one state,” said Brittany Carbone, co-founder of Tricora Farms and director of the New York Cannabis Association. ” he says.
Retailers are wary that the expected increase in supply won’t lead to a glut in Connecticut, as it did just across the border, Zacks said.
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“For me, this is frustrating, annoying and difficult to deal with, but this is not an unexpected problem,” he said. “What typically happens in states is that there isn’t enough supply at first, and then there’s too much supply, and that creates complete chaos.”
Still, he is wary of calls for national laws and standards, worrying that it could lead to large corporations taking over the industry from small farms.
“States are rightly focusing on entrepreneurs in communities that have been impacted by the war on drugs, black and brown communities,” he said. “I would argue that even the largest cannabis growers at the moment are startups, and as we consider solutions to this problem, the story of America’s common family farm is an alarming one.” I claim that.”
