Why Layoffs Are Inevitable In Cannabis Industry: Insights From Expert Pablo Zuanic

Pablo Zuanic, a cannabis and psychedelics industry expert, recently took center stage at the esteemed Benzinga Cannabis Capital Conference in Miami. He candidly discussed the critical challenges facing the cannabis industry, including layoffs and issues stemming from regulation and market saturation.

"A lot of people are criticizing brands for initiating layoffs. There have been a lot of cuts," Zuanic acknowledged, demonstrating a nuanced understanding of the current climate. "Because they seem to suggest that there should be cuts in other areas." Zuanic's perspective implies that while the layoffs are painful, they are necessary adjustments companies have to make to navigate industry challenges.

The managing partner at financial consulting firm Zuanic & Associates also discussed how some companies, which were initially built on the anticipation of rapid legalization in the US and Europe, now face a sobering reality, "In some cases, you have to remember that some very large companies may be perhaps overbuilt," Zuanic noted, hinting at the abrupt shift in expectations.

"Large #cannabis companies perhaps overbuilt on the assumption of quick US and European legalization. Now, they're facing a new reality," Pablo Zuanic on layoffs at the @Benzinga Conference
@420Odysseus @JasonRaznick
Join us in Chicago, Sept 27-28 - https://t.co/CxznNV6BRx pic.twitter.com/azNMm87qgw

— Javier Hasse (@JavierHasse) July 19, 2023

Yet, Zuanic's insights went beyond the immediate impact of layoffs. He delved into the heart of the industry's structural issues, particularly in Canada. Despite being the first legal recreational market in the world, Canada's cannabis industry has struggled with growth due to restrictive regulations.

"First of all, because of regulation, it hasn’t really developed or grown as it should. Yes, it’s the first legal recreational market in the world but consumption per capita, they are still below $100 US per capita," Zuanic highlighted. This situation contrasts starkly with the initial high hopes surrounding Canada's cannabis market.

Adding to the challenges, there's a glut of supply, leading to plummeting prices. "You’re seeing also because of the proliferation of licenses on the production side on the store side excessive supply. So prices in Canada retail $4 US per gram, that’s even lower than Oregon or Washington," Zuanic added.

Ultimately, Zuanic sees consolidation as the likely outcome for the Canadian market, given the overwhelming structural issues it faces. The Benzinga Cannabis Capital Conference continues to be an illuminating platform for industry stakeholders, with its next edition set for September 27 and 28 in Chicago. All relevant information is available on bzcannabis.com

"Canada's #cannabis market faces structural challenges due to regulation, stalling growth & excessive supply leading to low prices. We expect consolidation soon," Pablo Zuanic at the @Benzinga Conference@420Odysseus
Join us in Chicago, Sept 27-28 - https://t.co/CxznNV79H5 pic.twitter.com/ucK7xGJacg

— Javier Hasse (@JavierHasse) July 20, 2023