Wells Fargo Equity Research has released the Cannabis Cultivator Survey Edition 2 report based on data collected with Cannabiz Media in Fall 2022 through one of the most comprehensive outreach programs to cannabis cultivators. 

The second edition of the survey report includes new and updated data from cannabis cultivators in seven key states as well as comparisons to data reported in the Cannabis Cultivator Survey Edition 1 that was collected during Spring 2022 and released in June of the same year.

After analyzing the Fall 2022 data, the key takeaway reported by Wells Fargo is that there is “no recovery in sight,” which is a change from the key takeaway from the Spring 2022 report that stated, “this recovery will take longer.” Wells Fargo is “sidelined” on Scotts Miracle Grow, Grow Generation, and Hydrofarm Holdings Group stocks, and has kept the rating of all three to Equal Weight. 

Key Findings

• Cannabis pricing appears to still be falling.
• Only 27% of cultivators report selling prices above their breakeven level.
• Declining wholesale prices is causing the most frustration for growers (34%) as it was in the Spring 2022 report (38%).
• 64% of cultivators feel “bad” or “terrible” about their current markets (up from 62% in Spring 2022).
• 22% of cultivators are planning a full or partial exit (22%), which is slightly less than Spring 2022 (27%).
• Cultivators plan to purchase soil (66%, up from 61% in Spring 2022), nutrients (48%, down from 73% in Spring 2022), irrigation (39%, up from 35% in Spring 2022), and lighting (29%, down from 32% in Spring 2022).
• Sentiment continues to be low across the board, but there are some variations by state.
• Most cultivators continue to not expect things to improve in the near term.

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Detailed Findings

The full Cannabis Cultivator Survey Edition 2 includes 40 pages and 140 charts of data and analysis. We've highlighted several of the charts in the report below that focus on profitability, sentiment, likelihood to exit, and major causes of frustration. You can download the full report here.

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Methodology

Cannabiz Media conducted a survey outreach program to thousands of growers and ultimately, connected with 350 licensed cannabis cultivators in seven key US states including California, Colorado, Massachusetts, Michigan, Oklahoma, Oregon, and Washington. 

The survey was conducted via email and direct calling during October through December 2022 across a wide variety of grow environments (indoor, outdoor, greenhouse, etc.) and cultivation sizes (several hundred sq. ft. to more than 100,000 sq. ft.). 

A total of 350 responses were received from seven states representative of the largest cannabis markets today: 87 from California, 11 from Colorado, three from Massachusetts, five from Michigan, 157 from Oklahoma, 41 from Oregon, and 46 from Washington.

You can download the full report here.

Next Steps

We’ll continue to survey cultivators in the months ahead to see how their sentiment and economics change. Both this survey and the Spring 2022 survey provide a solid foundation for future studies and trend analyses. 

About the Author

Ed Keating is a co-founder of Cannabiz Media and oversees the company’s data research and government relations efforts. He has spent his career working with and advising information companies in the compliance space. Ed has managed product, marketing, and sales while overseeing complex multijurisdictional product lines in the securities, corporate, UCC, safety, environmental, and human resource markets.  

At Cannabiz Media, Ed enjoys the challenge of working with regulators across the globe as he and his team gather corporate, financial, and license information to track the people, products, and businesses in the cannabis economy.  

Ed graduated from Hamilton College and received his MBA from the Kellogg School at Northwestern University.

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