U.S. medical and adult-use cannabis companies have tallied up $3.8 billion in delinquent payments with total late payments on track to reach $4.2 billion in 2024, according to survey data and analysis from the Whitney Economics 2023 U.S. Cannabis Delinquent Payments Report.
The report found that the delinquent payments issue is universal to the cannabis industry but tends to hit cultivators harder than retailers; the delinquent payments also have a greater impact on smaller and minority operators. Additionally, 44% of respondents said that late payments by cannabis companies had impacted their ability to pay their own debts, while 34% said it had affected their ability to make tax payments.
Survey respondents were given the opportunity to provide written input — “I would love to pay my bills, if others would simply pay me first so I could do so,” said one respondent who had delinquent payments.
“The pressures created by current macroeconomic factors and regulatory policies have incentivized operators to stop paying their suppliers,” Beau Whitney of Whitney Economics said in a press release.
“This data further affirms the fact that the cannabis industry is struggling. Unless there is some form of federal and state regulatory intervention, the issues associated with the lack of payments will only get worse.” — Whitney, in a statement
More than half of survey respondents (57.3%) said that delinquent payments have a greater impact on their business than Section 280E of the Internal Revenue Code.
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