Introduction: Chasing Profitability
The seventh edition of the “State of the Cannabis Cultivation Industry Report” study included a new yes-or-no question: Was your operation profitable in the most recently completed fiscal year? More than half (53%) of the study participants answered “no.” Yet, nearly four in ten (39%) answered “yes.” Do either of those figures represent a seismic shift? We don’t know. But we will know in years ahead.
Research participants varied substantially in the amount of biomass they produced in 2022, as well the production costs and efficiencies weighing heavily in their profitability quest. In 2023’s study, nearly two-thirds (61%) of participants reported producing less than 10,000 pounds of cannabis biomass in 2022, with one-quarter (24%) producing between 10,000 and 20,000 pounds (see chart below). Nine percent of participants produced 30,000 pounds or more cannabis biomass that year.
As cultivators navigate industry changes, the 2023 “State of the Cannabis Cultivation Industry Report” suggests they’re refining the types of growing environments they use for cultivation. As in the past, many cultivators grow in more than one environment, but trends appear.
While the order shifted slightly from 2021, cultivation challenges remained fairly constant for participants in the 2023 “State of the Cannabis Cultivation Industry Report.” The most commonly cited top three cultivation-related challenges were “increasing yield” (30%), “achieving desired terpene/cannabinoid content” (28%) and “pest/disease prevention/control” (28%).
While the “State of the Cannabis Cultivation Industry Report” focused on current cultivation businesses, the research included questions regarding participants’ involvement in other areas of the supply chain.
Readex Research collected data for this report via an online questionnaire sent to all emailable, active, qualified subscribers to Cannabis Business Times magazine and/or e-newsletter in the U.S. or Canada, from April 6 to April 24, 2023. The study was closed for tabulation with 389 responses. Unless otherwise indicated, 2023 results are based on the 127 respondents who indicated they currently own or work for an organization that cultivates cannabis. Another 119 respondents indicated they do not currently own or work for a licensed cannabis operation, but plan to in the next 18 months. The margin of error for percentages based on the 127 respondents who currently own or work for an operation that grows cannabis is approximately +/- 8.6 percentage points at the 95% confidence level.
