The Source+ will be the first Massachusetts cannabis store to permanently close its doors since the state launched its legal adult-use market in 2018, Marijuana Business Daily reports.
The Northampton–based shop, which is owned by a Las Vegas-based cannabis company and operated by Just Healthy, received its license in 2019 and started sales earlier this year in April. Northampton is reportedly a competitive market for cannabis retailers, with at one point sporting 12 shops despite being a relatively small city with fewer than 30,000 residents.
The closure comes as Massachusetts experiences a sharp decline in legal cannabis prices that has carried on for more than a year, Boston.com reports.
The state hit its lowest prices yet in October at an average of $7.76 per gram of flower, then crawled back up to $8.04 per gram in November. That, however, was still lower than September’s average price per gram of $9.17, which was an all-time low for the state, and the average price per gram in August was ilkewise the state’s all-time low, the report said.
Theory Wellness CEO Brandon Pollock said that the industry’s early days had been marked by high prices due to the slow rollout of licenses, which initially created higher demand at the few shops that were able to open. But Pollock said in the report that the last 12 months have been “drastic” with wholesale market prices “down approximately 50% in one year.”
Joseph Lekach, CEO of cannabis company Apothca, said the primary issue is oversupply:
“There’s an extreme oversupply of flower, edibles, concentrates, vapes, basically any cannabis product.” — Lekach, via Boston.com
Lekach predicted that “a lot of companies” may go out of business next year and into 2024, warning that while consumers may appreciate the lower prices, they will likely note a drop in quality as cannabis operators adjust to the market changes.
“You’re going to have an inferior product coming out,” he told Boston.com. “It’s a double-edged sword.”
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