All roads in cannabis retail lead back to inventory.

Retail cannabis operators across the country are being squeezed by razor-thin margins, declining cash flow, and a growing inability to pay vendors on time. The culprit is often not weak sales or lack of demand. It is mismanaged inventory.

Inventory is the foundation on which the entire business is built. It is the single biggest driver of cash flow, profitability, and retail performance. Yet many retailers are still carrying too much product, reordering too late or too early, and failing to connect inventory decisions to merchandising, promotions, sell-through, and actual consumer demand. Brands feel the impact too. They cannot accurately forecast production, plan manufacturing schedules, or maintain healthy warehouse levels when retailers are not managing inventory effectively.

Excess inventory locks up cash, slows vendor payments, compresses margins, and creates pressure to discount. Too little inventory creates out-of-stocks, lost sales, frustrated customers, and strained brand relationships. In either scenario, poor inventory management undermines every other part of the business.

Many cannabis retailers are far exceeding the 30-day product turnover goal needed to keep cash flowing and inventory fresh. Some operators are sitting on more than $150,000 in overstock every month, cash that could otherwise be used to pay vendors, invest in marketing, open new locations, or strengthen operations.

From cultivation to retail, businesses are digging deep to tighten operations and increase margins as the only way to endure another grueling year in cannabis without federal support.

A common sales pitch these days centers on cost-saving systems and operational efficiency. The industry has shifted from “how fast can we grow?” to “how do we survive profitably?” There is little tolerance left for inefficiency.

A glance at the agenda for the upcoming MJ Unpacked show in Atlantic City, kicking off May 5, offers insights into the industry’s current challenges as we move through 2026. According to co-founder George Jage, the programming is shaped by input from committees across retail, brands, and cultivation, made up of operators who meet regularly to share pain points and what they are seeing on the ground.

“There’s no higher level of learning than peer-to-peer learning, and understanding the biggest pain points,” says Jage. “We take that information and design panels around the challenges and solutions operators are actually dealing with.”

Here is what I gleaned from this year’s agenda and where the industry is focusing. If the industry is going to stabilize, tight execution at every phase will matter.

For many cannabis founders, the exit problem is not finding the right buyer. It is that there are barely any buyers at all. The field is narrow, capital is tight, and the strategic buyers that do exist are rarely showing up with clean cash offers. More often, founders are being asked to accept low valuations, seller paper, stock in the buyer, or some other compromise that falls short of a real exit.

That leaves owners in a bad spot. They can sell on terms they do not like and watch the company they built get absorbed into a larger platform. Or they can keep running the business and hope the market improves. Neither is a strong answer for a founder who wants liquidity now.

For years, the industry has told itself a familiar story. Survive the chaos, build something real, wait for institutional capital, and eventually a good buyer will show up. It is a nice story. It just has not been true for most operators.

Cannabis does not have a deep buyer universe. 

Most private equity firms have stayed away from plant-touching companies because there is no clear exit path. Most large strategic buyers have their own capital constraints, which means they buy selectively and often on terms that shift risk back to the seller. At the same time, 280E has drained cash from otherwise solid businesses, making it harder for founders to wait around for a market that may or may not improve.

That is why so many owners have been stuck in the same position for years: they have built valuable businesses, but when they want liquidity, the options are limited, and the terms are often weak. “Hold on, and the buyers will come” is not much of a plan.

At the recent Business of Cannabis event in New York, Robert Sciarrone, Chief Revenue Officer at Curaleaf, shared an MSO’s insider view on why he believes New York is poised to become the best cannabis market on the planet.

Sciarrone began by reflecting on his early years as a cannabis-focused venture capitalist. Through his firm, Measure 8 Partners, he has deployed more than $550 million across 20-plus cannabis companies globally, including dispensaries, delivery services, and technology platforms, with investments spanning California, Arizona, Nevada, Canada, and Europe.

After joining Curaleaf two and a half years ago, recruited by Executive Chairman Boris Jordan, Sciarrone transitioned from investor to operator, now overseeing revenue across 18 states in both retail and wholesale. He admitted the operational grind has given him a new respect for the business side of cannabis, but emphasized that passion for the plant and its customers remains the heart of the industry.

Looking back on the “freewheeling” investment era of 2019, when $100 million deals were being done daily, Sciarrone contrasted that speculative period with today’s market. “California’s day is over,” he declared, suggesting that the West Coast market’s oversaturation and regulatory struggles have created space for New York to lead. With its cultural influence, economic strength, and growing consumer sophistication, Sciarrone believes New York can set the standard for how cannabis culture and business shape the global industry.

As a born-and-raised New Yorker, Sciarrone expressed deep pride in being part of that evolution: “It’s my passion to be here and watch this market unfold.”

It starts with a routine test result. A mid-size cannabis brand discovers that a batch of infused edibles has failed a pesticide screening. Within 48 hours, the company issues a voluntary recall, pulls product from dozens of dispensary shelves, and begins fielding calls from anxious retail partners. The financial damage — replacement inventory, logistics, regulatory compliance, and reputational repair — runs well into six figures.

Then comes the second blow: the insurance claim. The carrier cites an exclusion. The payout falls far short of actual losses. Or worse, the policy is non-renewed because the company is now considered “high-risk.”

This scenario plays out more often than anyone in the industry wants to admit. And it exposes a structural problem unique to cannabis: the commercial insurance market is thin, expensive, and full of holes.

Why Commercial Insurance Keeps Failing Cannabis Operators

Because cannabis remains federally illegal, the pool of insurers willing to underwrite cannabis businesses is small. Limited competition drives premiums up and coverage terms down. Many policies carry broad exclusions for the risks most common in cannabis operations — product recalls, crop loss, regulatory actions, and inventory spoilage. Operators routinely overpay for insurance that underperforms, year after year, enriching carriers while getting little in return.

Missouri has quietly built one of the country’s more successful adult-use cannabis markets since launching recreational sales in 2023. Since legalization, the state has quickly grown into one of the largest cannabis markets in the Midwest, generating strong sales and supporting an expanding network of cultivators, processors, and dispensaries.

Unlike many states that see medical patient numbers decline after legalization, Missouri has continued to grow its medical program even as adult-use sales expand.

Curio Wellness, a vertically integrated cannabis company founded by the Bronfein family and headquartered in Baltimore, has been steadily expanding its presence in the state. The company first entered the Missouri market through the acquisition of a cultivation facility and broadened its retail footprint last fall with the purchase of four Greenlight Dispensaries locations.

Wendy Bronfein, Chief Brand Officer and co-founder of Curio Wellness, praised the rollout of the Missouri market, noting that while Missouri operates under a limited-license framework, the market still supports a robust number of operators and retail outlets, creating strong statewide distribution. Bronfein also touted the program’s tax structure, noting that taxes collected from the medical cannabis program are directed to a veterans’ fund that has already received tens of millions of dollars.

She added that Missouri has been notable for both clearly reporting revenues and delivering funds to its intended programs—something that does not always happen in other markets. The program’s success is particularly noteworthy, she said, given that Missouri is a traditionally conservative state, challenging assumptions that well-functioning cannabis markets only emerge in more progressive regions.

While the cannabis industry has made significant strides in incorporating minor cannabinoids into product formulations, a vast number of therapeutic compounds remain largely unexplored. Researchers and cannabis physicians have been experimenting with acidic cannabinoids for several years with promising results, but the broader industry is only now beginning to catch up. As extraction technologies improve and research advances, more acidic cannabinoids are appearing in new product formulations.

“People are more and more focused on acidic cannabinoids now because, before, we did not have the advanced extraction technology to isolate them in a highly purified form, and now we do,” said Hemant Kumar Bid, PhD, program director for the Master of Science in Biotechnology at Morehouse School of Medicine, where he focuses on medical cannabis.

“The plant produces cannabinoids in their acidic form,” Bid explained. “These acids are the precursors to neutral cannabinoids such as CBD and THC.”

Among the acidic compounds, Bid has a particular affinity for cannabigerolic acid (CBGA), often referred to as the “mother of all cannabinoids.”

“In the scientific world, we call it the stem cell,” he said. Stem cells are extremely powerful because they can develop into many different types of cells in the body. CBGA works in a similar way in the plant.

Biotechnology, cannabis medicine, and the rapid advancements in artificial intelligence (AI) and machine learning (ML) are beginning to converge.

Hemant Kumar Bid, program director for the Master of Science in Biotechnology and the Medical Cannabis concentration at Morehouse School of Medicine, believes this convergence could dramatically accelerate the development of cannabis-based therapies. With AI, cannabis medicine may move beyond today’s trial-and-error approach toward more personalized, precise treatments.

Biotechnology combines biological science with advanced technology to develop medical solutions, including drug discovery, genetic engineering, and diagnostic tools. “Modern biotechnology focuses on molecular biology, genetic engineering, and advanced cell culture techniques. This is where it will advance cannabis medicine,” explains Bid.

The Foundational Elements of AI and Machine Learning

AI and machine learning are closely related but serve distinct roles.

When most people think of luxury goods, they picture high-quality, high-priced products. But what truly sets luxury apart is not just cost. It is craftsmanship, design, heritage, cultural cachet, and mastery of materials and technique. Luxury is a sensory experience rooted in both tradition and innovation.

Cannabis, with its complex chemistry, rich history, and powerful sensory appeal, has all the makings of a luxury product. Yet few brands have moved beyond upscale packaging and clever marketing. The industry is still waiting for its equivalent of Chanel No. 5, Moët & Chandon, or Tiffany.

To understand what it takes to build a bona fide luxury cannabis brand, I spoke with Dr. Avery Gilbert, a sensory scientist and former luxury perfumer who has worked with world-renowned fragrance houses. Today, he brings that expertise to cannabis product development. According to Gilbert, the secret ingredient is blending, an art that defines both luxury perfume and fine wine and may be cannabis’s missing link to true luxury status.

Gilbert outlines how cannabis brands can apply lessons from California’s fine wine cellars and Paris’s perfume ateliers to craft products worthy of legacy status.

There’s an opportunity in the pre-roll sector that many companies are missing.

The pre-roll sector is the fastest-growing category in the cannabis industry. In 2025 alone, $3.6 billion worth of pre-rolls were sold across the 14 markets tracked by cannabis analytics firm Headset.

Customers love the portability, the ease of use, and the innovation modern pre-roll producers are bringing to shelves, not to mention a price point that gives them a chance to try new strains and brands. On top of that, New Frontier Data found that the joint is still the top preference for consumption.

But even with millions of products and thousands of brands competing for those dollars, an opportunity lurks. For example, while joints may be the top way people consume, the blunt sits firmly in third place, with 33% of smokers listing it as their favorite way to consume.

Meanwhile, the pre-rolled blunt segment remains one of the smaller parts of the pre-roll industry, accounting for just 4.1% of pre-roll revenue.

Maryland launched its medical cannabis program in 2018 and transitioned to adult use in 2024 as a limited-license state. Currently, there are 108 active dispensaries, with additional operators expected to come online following a March 2024 lottery that awarded conditional licenses to social equity entrepreneurs. However, these licensees still need to clear a vetting process and satisfy build-out, security, and local zoning requirements. As a result, many social equity operators remain in pre-operational or early build-out stages as of 2025 and 2026, making it still unclear how many will reach market.

According to Headset, Maryland generated an average of $96 million in monthly sales in 2025. Over the past year, the market has demonstrated resilience, with year-over-year growth rates consistently positive. Growth peaked at over 6 percent in mid-2025 and remained at 1.3 percent year-over-year in January 2026. While month-to-month fluctuations reflect seasonality, promotional cycles, and evolving competitive dynamics, the broader trajectory suggests a market transitioning from early expansion to measured stabilization.

Headset also reports that pricing in Maryland remains higher than in many mature cannabis states, with the average item price at $28.00 in January 2026. Elevated pricing reflects strong consumer demand, limited license supply constraints, and a product mix skewed toward premium offerings. Notably, unit sales have remained robust despite these higher price points, signaling that Maryland consumers are willing to pay for quality, brand differentiation, and curated retail experiences. The pricing environment also suggests that, while significant price compression is present, it has not yet reached levels seen in more saturated Western markets.

In an interview, Chase Lessman, Vice President of Sales at Culta, described the company’s position within this developing ecosystem. Culta is one of three locally owned, Maryland-based vertically integrated operators that launched in the medical era and later expanded into adult-use. “Adult use occupies a higher percentage of sales than medical, but that is typical of a growing marketplace,” Lessman said, noting that the medical channel remains important for industry growth.

Culta recently appointed cannabis industry veteran Joseph Andreae as CEO. Andreae previously held leadership roles at Story Cannabis, Glass House Brands, and NorCal Cannabis, bringing operational scale experience from highly competitive markets. Culta currently operates 35,000 square feet of greenhouse cultivation and six acres of outdoor grow, giving it flexibility across production tiers and cost structures.

A new scientific review published in the National Library of Medicine (NIH) shines a spotlight on one of the most overlooked areas of cannabis science: the untapped benefits of acidic cannabinoids naturally produced by Cannabis sativa — THCA, CBDA, CBGA, and CBCA.

These compounds are the biosynthetic precursors to THC, CBD, CBG, and CBC. But the review makes a critical point: acidic cannabinoids are not simply “pre-THC” or “pre-CBD.” In their native form, they are non-intoxicating, pharmacologically distinct, and biologically active in their own right.

All major acidic cannabinoids originate from CBGA, often referred to as the “mother cannabinoid,” which is enzymatically converted into THCA, CBDA, or CBCA in the plant’s glandular trichomes. However, the challenge in accessing these powerful compounds lies in their chemical instability. Exposure to heat, light, oxygen, or time triggers decarboxylation — the loss of CO₂ — converting THCA into THC, CBDA into CBD, and CBGA into CBG.

Standard drying, curing, extraction, distillation, baking, and even storage conditions unintentionally reduce acidic cannabinoid content. Thermal extraction methods commonly used in manufacturing can effectively eliminate the very compounds this review highlights as therapeutically promising. Preserving acidic cannabinoids requires cold processing, stability-aware packaging, careful solvent management, and analytical methods that avoid artificial decarboxylation during testing.

From a pharmacological perspective, acidic cannabinoids exhibit multi-target activity that differs meaningfully from that of their neutral counterparts. Rather than strongly binding to CB1 receptors, THCA shows minimal CB1 affinity, meaning it does not produce intoxication. Instead, acidic cannabinoids act on molecular targets including 5-HT1A serotonin receptors, COX-2 enzymes, PPARγ nuclear receptors, TRP ion channels, calcium signaling pathways, and Alzheimer’s-related enzymes such as BACE-1 and cholinesterases.

2025 saw most businesses scrutinizing their operations to trim margins and survive the tumultuous market. 2026 is about digging deeper to uncover hidden costs that will further improve their bottom line.  

Tom Zuber, partner at Zuber Lawler, led a panel discussion at the recent IgniteNJ event, where experts offered advice on margin discipline and where to cut costs.

What to Consider When Entering A New Market

Trent Woloveck, Chief Strategy Officer at Jushi Holdings, says retailers entering a new market must evaluate three core cost centers: labor, compliance, and real estate.

Operators should closely analyze traffic patterns, peak hours, and staffing models to understand true operating costs and potential revenue. Retail, he notes, is a people-centric business where customer experience cannot be sacrificed, even in a margin-compressed environment.

New Jersey is a highly desirable cannabis market for new operators because of its rapid billion‑dollar growth, strong consumer demand, and status as one of the most profitable yet undersupplied markets on the East Coast.

Cultivators came together at the recent IgniteIt event to share their perspectives on the market. Genetic preservation, price compression, the future of breeding, and what makes a great cultivator were among the key topics.

What Makes A Good Cultivator?

Aside from operational chops, a cultivator must be able to “read the room” in their cultivation facility. Panelist Chad Salute, Head of Cultivation at iAnthus, who has been growing since the 90s, says, “It’s not just a set-and-forget-it environment, light or irrigation strategy.” He added that great cultivators are the ones who can come in, read the plants, and push them as hard as they can to get the most expression.

Salute explained that top growers rely on constant observation and hands-on adjustments. They monitor subtle cues like plant color, structure, and canopy variation, then fine-tune conditions daily. He compared the process to training athletes, noting that strong vegetative growth lays the foundation for peak performance later in the cycle. Ultimately, he said, the difference comes down to experience and instinct. The best cultivators can scan thousands of plants, spot small micro-environmental issues, and make targeted changes that bring out the highest quality results.

There was passion, power, and plenty of practical business advice from the women (and one man) who took the stage at the recent IgniteIt event in New Jersey. As the industry shifts away from the early “shiny-object” phase, operators are increasingly doubling down on what works. A few years ago, the prevailing growth strategy was to go wide, not deep. Today, that mindset has changed.

Miss Grass CEO Kate Miller said the company is prioritizing focus over expansion for expansion’s sake. “We are focusing on what’s working,” she explained. “More specifically, we are investing in our priority markets.” While the brand currently operates in eight states, Miller noted they no longer treat every market equally; instead, they concentrate resources on their top performers rather than spreading themselves too thin.

Find Your Partner and Do-si-do

Faye Coleman, CEO of Pure Genesis Dispensary, emphasized that success in cannabis rarely happens alone. “You don’t have to stand alone and fight this battle,” she said, encouraging operators to think creatively about partnerships as stepping stones to growth.

“Sometimes your retailer is your partner. Sometimes your vendor is your partner, your ancillaries are your partner, even your insurance carrier is your partner,” she explained. “All those partnerships do exist.”

Market Maturity Brings Pricing Pressure

New Jersey’s cannabis market is showing signs of maturity, according to a presentation by Headset CEO Cy Scott at the recent Ignite NJ event, saying the overall revenue hit the billion-dollar mark in 2025 and is growing nominally.

Similar to other markets in the growth cycle, while more customers are visiting dispensaries and transactions are slightly increasing, many individual retailers are seeing declining sales. Scott said this disconnect reflects intensifying price pressure, as shoppers spend less per visit amid growing competition and discounting.

Other factors contributing to the squeeze include retail saturation. Because municipalities can opt out of cannabis businesses, some regions have become retail deserts while others face dense clusters of competing dispensaries.

At the same time, performance varies widely across operators: some stores are significantly outperforming the market, while others are struggling, highlighting the growing importance of location, strategy, and execution in a maturing landscape.

Comparisons with neighboring New York also suggest continued downward pressure on pricing as the two markets evolve side by side.

California’s medical cannabis market began in 1996 when voters passed Proposition 215 (the Compassionate Use Act), making it the first state to legalize cannabis for medical use. Twenty-two years later, Proposition 64 ushered in adult-use sales, which commenced in January 2018.

Initially, three separate agencies handled different aspects of the industry:

The Bureau of Cannabis Control (BCC) oversaw retail sales, distribution, testing laboratories, and microbusinesses for both medical and adult-use cannabis. Cannabis Cultivation Licensing (part of the Department of Food and Agriculture) regulates and licenses commercial cannabis cultivation operations, including track-and-trace systems. The Manufactured Cannabis Safety Branch (part of the Department of Public Health) managed licensing and oversight of cannabis product manufacturing, such as edibles, concentrates, and topicals.

In July 2021, these three programs were consolidated into the California Department of Cannabis Control (DCC) to streamline licensing and enforcement, enhance consumer protection, eliminate redundancies, and simplify compliance for businesses.

The Super Bowl has long been one of the most important sales moments of the year for alcohol, food, and consumer packaged goods. Cannabis, however, has been left out of the conversation, often due to regulatory complexity, limited retail data, and conservative planning assumptions. However, new purchase data suggests a missed opportunity.

Cannabis Is Already Part of Super Bowl Weekend

Analysis of cannabis retail sales in conjunction with the surrounding Super Bowl weekend shows a clear and repeatable pattern. Surfside conducted research and found that demand begins rising nearly two weeks before kickoff, peaks the Saturday before the game, and remains elevated through the Monday following the event. In fact, the Saturday before the Super Bowl is the highest cannabis sales day year-to-date in observed markets, with total revenue increases reaching more than 60% above baseline.

The Formats Fueling Super Bowl Sales

Sales growth during Super Bowl weekend is disproportionately fueled by convenience-oriented and social-friendly cannabis formats. Pre-rolls, THC beverages, and concentrates experienced the highest category lifts, with pre-roll sales increasing nearly 90% above average daily sales and THC drinks surging by more than 80%. These formats suggest that cannabis consumption during the Super Bowl mirrors broader party behavior. Consumers are selecting products that are easy to share, quick to consume, and compatible with group settings.

This challenges the assumption that Super Bowl cannabis demand is driven mainly by hosts stocking up in advance. Instead, data indicates that many purchases are driven by guests bringing individual-use products, positioning cannabis as both an alcohol alternative and a companion at watch parties. For retailers, this has meaningful implications for merchandising strategy, bundle planning, and staff education.

The Post-Game Sales Lift

Cannabis sales remain elevated on the Monday following the Super Bowl. Whether driven by physical recovery, stress relief, or new product discovery during the game, consumers continue to purchase at higher-than-normal rates the day after the game.

Josh Kaplan, PhD, is a neuroscientist and associate professor in the Behavioral Neuroscience program at Western Washington University, where his lab focuses on optimizing cannabidiol (CBD) based medicines for pediatric conditions. His work examines not only CBD’s therapeutic potential, but also its long-term developmental effects on the brain, an area of growing importance as cannabinoid therapies move deeper into clinical use.

Kaplan’s interest in CBD research began in 2015, when he was asked to evaluate Epidiolex in a mouse model of pediatric epilepsy. The treatment produced significant seizure reduction in cases where other medications had failed. The results were striking and sparked his interest in a deeper investigation of CBD and how it might work in other pediatric conditions.

While different medical conditions require different dosing, Kaplan’s lab is also exploring whether the same medication or formulation could be effective across a range of symptoms by adjusting the dose. “Can we improve CBD-based medicine by expanding that dose window so that, regardless of whether you are trying to treat epileptic seizures or improve social behaviors and communication deficits, a single formulation could be effective?” explained Kaplan.

The team evaluates CBD’s effects by modeling specific behaviors in mice, including anxiety, depression, and social interaction. By testing a wide range of doses, they can pinpoint where therapeutic effects emerge and where they fade.