Welcome to the cannabis crunch: Mass. marijuana industry braces for turbulent 2023

The Massachusetts marijuana industry is on the verge of an impressive milestone: $4 billion in revenue since recreational sales began in November 2018, a total that has also

netted state and local governments hundreds of millions of dollars in taxes. But when the state surpasses that mark — likely in the next month or so — there may not be much

celebration from its roughly 250 cannabis stores. That’s because a newly legal industry previously seen by giddy investors and entrepreneurs as the next gold rush has turned

out to be more like an ordinary commodity market, with a massive increase in wholesale supply and retail competition over the past year causing an equally massive price crash. As

a result, many operators are watching their slice of profits shrink even as the overall pot pie continues to grow. “Everyone was expecting it would be a high-margin boom,

but now it’s a race to the bottom,” said Kobie Evans, co-owner of the Pure Oasis marijuana store in Boston. “The market shifted very quickly within the last 12 months, and for

investors, there’s a low probability they’ll get the returns they once anticipated.” By any aggregate measure, however, 2022 was a banner year for the Massachusetts

marijuana sector. Recreational sellers posted a record $1.42 billion in revenue through December 18, up from $1.33 billion in 2021. And thanks to the 20 percent effective

tax on most recreational marijuana sales in Massachusetts, a significant chunk of last year’s weed windfall ended up in public coffers: approximately $284 million, plus millions

more in local “impact” fees.