Worcester Business Journal

wbjournal.com | January 23, 2023 | Worcester Business Journal 9 e cinching is happening from inves- tors, said O'Brien. e capital markets have slowed for fear of an economic slowdown with publi- cations like Bloomberg and Business Insider reporting a recession is looming, which means investors are holding onto their money for fear they may not get back the returns they envision. "Capital markets, all types, are tight all over [the place]," O'Brien said. For local cannabis operators, the slowdown in price isn't too big of a fear at first because as people have more options and there are more grow facilities, the excess product was going to eventually drive the price down. For Marc Rosenfeld, one of the co-owners of CommCan, Inc., which has a facility in Medway and dispen- saries in Millis and Southborough, the worry comes from multi-state operations coming into Massachusetts with cash and investments. e multi-state groups have product, money, and teams built on pushing themselves into the crowded marketplace. ey can bully smaller businesses and drive down the price of products without worrying about covering the numerous overhead costs it takes to open a facility or dispensary. "ey're not here to run a business," Rosenfeld said about multi-state cannabis operations. "ey just want market share." For Rosenfeld, it's important, especially with something like marijuana, for people to trust the product they're buying, including knowing how and where it was grown. "It's important for people to understand what they're buying. Le- gal cannabis is still new to people," Rosenfield said. Overly regulated While legal pot may seem new, the business of buying it isn't. e illegal marijuana market bubbled under the surface. Robin Goldstein is an economist and author of "Can Legal Weed Win? e Blunt Realities of Cannabis Econom- ics" and sees the drop in price point and the closure of a store in Northamp- ton not so much as an issue with viability of the marijuana business in Massachusetts, but due to regulations and costs hampering it. Goldstein, who grew up in Northampton and is the director of the Cannabis Economics Group in the Department of Agricultural and Resource Economics at the University of California, Davis, said because legal marijuana has to look like an Apple Store due to all of the safety precau- tions and regulations, the market is too tight and can't reach everyone it needs to, which is why people still buy from the black market. Take e Source in Northampton, for example, which was the first dis- pensary in the state to close when it did so on Dec. 16. It opened within blocks of six other dispensaries, meaning the stores were competing for the same cli- entele. As Goldstein sees it, there aren't too many marijuana shops; there's just too many hoops to jump through, and communities cluster stores together. Worcester, too has this same issue, Goldstein said. Four of the city's 13 dispensaries are in the Canal District. Near Beaver Brook and Curtis Pond, three stores are in close proximity while other parts of the city, like Tat- nuck, don't have any. Retailer 270 200 Cultivator 117 249 Manufacturer 97 188 Microbusiness 10 24 Testing laboratory 12 8 Transporter 7 5 Craft marijuana cooperative 4 0 Research facility 1 0 TOTAL 518 674 Licenses Licenses Business type approved & issued pending approval More cannabis businesses Massachusetts has more cannabis business licenses now under consideration than have been issued since voters legalized adult- use marijuana in 2016. Source: Massachusetts Cannabis Control Commission 2018 2019 2020 2021 2022 Cost per ounce in November of each year $414 $405.07 $376.64 $399.37 $228.88 Falling Mass. marijuana prices W Source: Massachusetts Cannabis Control Commission

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