California’s cannabis industry is facing severe credit issues that threaten its stability, with unpaid invoices and outstanding debts posing significant challenges to operators of all types across the state. In response, a coalition of cannabis industry players has formed the Financial Stability for California Cannabis (FSCC) to raise awareness and offer solutions to the crisis.
In a groundbreaking move to address the credit crisis plaguing California’s cannabis industry, a formidable coalition has emerged. Industry leaders including Kiva Sales & Service, Lowell Farms, Nabis Sunderstorm, and other key players, the Financial Stability for California Cannabis (FSCC) is taking a stand to raise awareness and propose solutions to the pressing credit issues that threaten the industry’s stability. Notably, these industry giants collectively represent 45% of the state’s cannabis market sales volume.
Vince Ning, the co-founder, and co-CEO of Nabis, has aptly pinpointed collections and outstanding debts stemming from unpaid invoices as the primary challenges faced by cannabis operators throughout the state. The gravity of these issues cannot be overstated, as they transcend cultivators, manufacturers, vertical brands, wholesalers, and all other entities operating within the intricate web of California’s cannabis supply chain.
The coalition supports AB 776, “The Cannabis Credit Protection Act,” a California bill that aims to establish regulatory oversight around credit terms across the cannabis supply chain. The bill is aimed at bringing financial stability to California’s industry and ensuring that operators receive payment for goods and services in a timely manner.
California’s cannabis industry lacks the same oversight of sales made on terms that other similar consumer industries have, which leads to nonpayment of invoices and late payment of invoices being commonplace across the supply chain. This “culture of nonpayment” leaves businesses across the entire industry and supply chain with outstanding balances and unpaid invoices, sometimes totaling hundreds of thousands of dollars.
The financial instability of the cannabis industry in California is a significant issue that needs to be addressed. The lack of regulatory oversight around credit terms has left operators with limited options for financing and capital, resulting in a severe debt bubble across the supply chain from cultivators to retailers.
The FSCC’s efforts to establish regulatory oversight around credit terms across the cannabis supply chain are essential to ensuring the financial stability of the industry. By working together to raise awareness and offer solutions to the credit issues facing the industry, the coalition hopes to demonstrate a more holistic, collective representation of the severity of the debt crisis across all levels of the supply chain.
The Financial Stability for California Cannabis Coalition is taking an essential step toward addressing the credit issues that threaten the stability of California’s cannabis industry. By supporting AB 776 and working together to raise awareness of the problem, the coalition is helping to ensure that operators receive payment for goods and services in a timely manner, which is essential to the growth and success of the industry.
