An Industry Primed For Recession: Cannabis Leaders Optimistic Despite Inflation, Per Vangst Report

Vangst, a leading cannabis industry staffing platform, released a new white paper discussing the economic pulse of the cannabis industry based on results from their 2022 Salary Guide survey that closed in September.

“Due to federal regulations, access to capital has always been tough for cannabis businesses. Since most companies have never had the luxury of unlimited capital, cannabis has always been a scrappy industry — one that has been primed to be more prepared than any other industry should we enter a recession,” states Vangst founder and CEO Karson Humiston in the report.

“Any coming recession is just another reminder that cannabis leaders should be building profitable businesses that are not reliant on endless rounds of funding. The cannabis industry has massive tailwinds — another advantage that other sectors don’t have. New states are opening up legal cannabis programs every year, more consumers are entering the market, and legislation has positive momentum,” Humiston said.

Key Insights

• Less than 50% of those in traditional industries see their capital spending or hiring numbers growing in the next six months. Nearly 70% of surveyed cannabis companies feel their capital spending and hiring will grow.
• Inflation, labor and an uncertain national economy are all big worries for business leaders, no matter their industry.
• Almost 70% of respondents expect their sales to increase in 2023, with less than 10% anticipating a decrease.
• 67% of respondents anticipate greater employment by their company.
• 7% expect a decrease in employees and 20% foresee no changes.
• Nearly 60% expect Capex to increase, less than 10% expect it to decrease and about 16% anticipate no change.

A Resilient Industry

According to the report “a majority of cannabis leaders” (...) “are bullish about their own companies’ prospects in 2023.” “By large margins, cannabis leaders told us that they expect sales, capital spending, and hiring to increase over the next 12 months. 

However, the report highlights that cannabis executives remain “bearish on the overall U.S. economy, as well as the overall cannabis economy.”

“A large majority of respondents told us that the U.S. economic conditions are worse than they were a year ago, and an even larger majority said that economic conditions in cannabis are worse than they were a year ago,” points out the study.

Despite the different economic outlooks the report notes that the cannabis sector shares similar challenges as mainstream businesses.

“According to Vangst survey data and J.P.Morgan Chase’s midyear 2022 Business Leaders Outlook Pulse Survey (...) inflation, labor, and an uncertain economy are all major concerns for many leaders across sectors.” 

Image By Steve Buissinne On Pixabay.