Whitney Economics says U.S. cannabis operators carried more than $3.8 billion in delinquent receivables at the end of 2023, projected to top $4.2 billion in 2024. California’s legislature has tried twice to mandate timely vendor payments. Both bills died. A public credit-scoring platform is now filling the gap.
The cannabis industry has a payment problem. According to Whitney Economics, U.S. cannabis operators carried more than $3.8 billion in delinquent receivables at the end of 2023, with projections topping $4.2 billion in 2024. That figure equals roughly 1.6 months of total legal U.S. cannabis retail revenue, sitting on the books across the supply chain.
A public credit-scoring platform now tracks which California operators have the lowest ratings.
A $3.8 billion problem
Whitney Economics, the leading economic research firm in the cannabis sector, published its 2023 U.S. Cannabis Delinquent Payments Report in early 2024 under a blunt title: “Cannabis Delinquencies: An Existential Threat to the U.S. Cannabis Industry.”
The survey findings landed hard. 57.3% of respondents said delinquent receivables have a greater impact on their business than 280E, the federal tax code provision that has long been the industry’s signature complaint. 44% said unpaid receivables are impacting their ability to service debt. 34% said it was impacting their ability to pay state or federal taxes. More than half of all delinquencies (56.3%) are over 45 days past due.
The vendor payment crisis, by the numbers
U.S. cannabis industry, per Whitney Economics’ 2023 Delinquent Payments Report.
$3.8B
Total delinquent receivables across the U.S. cannabis industry, year-end 2023
$4.2B
Projected delinquent receivables for 2024 without intervention
1.6 mo.
Of total U.S. cannabis retail revenue currently sitting on the books
57.3%
Of operators say unpaid receivables hurt their business more than 280E
Source: Whitney Economics, 2023 U.S. Cannabis Delinquent Payments Report (March 2024).
“The pressures created by current macroeconomic factors and regulatory policies have incentivized operators to stop …
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Author: Javier Hasse / High Times
