The Quiet Crisis No One Wants to Talk About in Colorado Cannabis: A Growers plea to the Industry…
Behind the glossy branding and legalization headlines, a growing problem is violently making its way to the surface of Colorado Cannabis. Admittedly, the drop in wholesale prices and lowering demand have been “less than ideal”, but right now, one of the most damaging problems we face isn’t price compression or overproduction. It’s dispensaries not paying their vendors on time, or worse, not paying at all.
On paper, cannabis is a regulated, professional industry. But in reality, many cultivators are being forced into a position no legitimate business should ever have to tolerate; shipping product with no real assurance of payment, then being told to wait, renegotiate, or simply accept the loss. Make no mistake… What we have here is an example of classic monopolistic economics. Risk flows downhill, while profits flow up. A far cry from the meritocracy that fueled the Green Rush a decade ago.
So let’s talk about how this actually works at the operator level, because the math, and the reality… is brutal.
As cultivators, we are required to pay excise tax on every pound we send out the door. Not when we get paid. Not when a retailer sells it. When it leaves our facility. In Colorado, that excise tax is 15% at the state level and several local jurisdictions (such as Aurora) add 5+% on top of that! So, in theory, if we sell a pound of flower for $700, (a number that already reflects how far wholesale prices have fallen) we owe the state $105 immediately, minimum. If that dispensary never pays us, our loss is not $700. It’s $805. Now also remember…That flower came from a building with rent, whose landlord doesn’t care about market conditions. Nor does the bank in which he holds the mortgage with. It came from lights that pull power every single day. It came from labor: people who trim, water, scout, clean, and manage, and who rightly expect a paycheck on time. It came from nutrients, genetics, compliance costs, testing, packaging, security systems, cameras, software, licenses, and inspection charges. None of those vendors accept “the dispensary didn’t pay us” as an excuse. In many cases, when taking everything into account, the loss of an unpaid pound compounds to somewhere slightly north of $1400 for the grow! There is no other legal industry where this sort of indifference would be acceptable. As a restaurant owner, I cannot fathom stiffing my food supplier for months while continuing to operate. It would never happen. Yet in cannabis, it’s become disturbingly common.
Here is the part of the conversation that rarely gets said out loud: when a dispensary takes product and doesn’t pay for it, that isn’t a market fluctuation. That’s theft. It may be dressed up in emails about cash flow, slow sales, or pending investment. But at the end of the day, the product is gone, the tax has been paid, and the cultivator is left holding the compounded loss. That is theft.
What makes it worse is the power imbalance. Many cultivators are afraid to speak up because the market is tight and shelf space is finite. If you push too hard, you risk being blacklisted. If you demand COD or stricter terms, you’re told you’re “difficult to work with” or you simply have no customers. So, people stay quiet, hoping the check comes next week, then next month, then “after the next round of funding.”
People, hope is not a business strategy.
The irony of this catastrophe is that cultivators are often painted as the ones who need to “get leaner” or “adapt.” We’ve already adapted. We’ve cut margins to the bone. We’ve optimized yields, reduced staff, deferred maintenance, and absorbed losses that would sink most industries. What we cannot adapt to is a system where payment is optional for retailers.
We are getting to a point where this isn’t just about a few individual businesses failing. It’s about trust eroding across the entire supply chain. When cultivators can’t rely on payment, they stop investing. They stop hiring. They stop innovating. Quality drops, diversity shrinks, and consolidation accelerates. All in all… It’s the good actors, the honest, legitimate operators that get pushed out, not by bad product or poor management, but by unpaid invoices of the ignorant and disingenuous.
I still believe in Colorado cannabis. More importantly, I believe in this plant, and in the people who work tirelessly to produce it with integrity. But belief alone doesn’t pay taxes, rent, or payroll. Accountability does. If we want this industry to survive, we need to stop pretending that nonpayment is just “part of the business.” It’s not. It’s exploitation. And until we call it what it is and demand better from those who benefit from our work, the losses will keep compounding, one unpaid pound at a time.
Mike Thompson, Level 10