Originally published by LightNow News by Guest Author Andy Montgomery, President of Ultra Yield Solutions.

This year’s MJBizCon was a mix of new market enthusiasm subdued by mature market malaise.  Like previous shows, stalwart lighting brands prominently displayed their wares including Gavita, Fluence, HLG, Signify, Fohse, etc.  Booths were massive with most providing sunglasses to avoid the powerful 600W+ rays. A new participant also debuted – Verjure by Acuity Brands – supporting a full suite of products that will give the biggies a run for the money. A myriad of Tier 2 brands and Chinese contract manufacturers rounded out the remaining exhibitors. All totaled, over 100 lighting and light-related manufacturers were on the floor, according to MJBizCon.

While floor enthusiasm was palpable, educational side sessions were far more sober. Mature markets are suffering right now as hundreds of cannabis greenhouses have gone empty due to (a) painful taxes, (b) plummeting wholesale prices, (c) exploding electrical costs and (4) lack of vertical integration. Five years ago, the price/pound of California cannabis exceeded $2,500. Today, one pound of greenhouse-grown cannabis is ~$500, an 80% drop. While this pain is most felt in California, similar market realities are bearing down on Oregon, Washington, and Colorado.

Even Massachusetts is starting to feel the pull-back, and profits are plunging.  What’s interesting is that swapping out HPS for LED will dramatically reduce OPEX and can often pay out within two years. Sadly, most cannot find the money to save money. At the end of the day, most growers will struggle unless they dramatically reduce operational expenses AND provide value-add refinement to their crop (e.g., extraction, processing, dispensaries).

The taming of any category means free-for-all opportunity has given way to best practices, bottom lines, and regulations.  Soon cannabis will be Federalized, allowing banks to freely support them in a manner akin to wine and spirits. This also means outside investors are no longer at risk, and nobody works the system better than Big Money. That’s just how it works. See you all next year. No need to bring sunglasses.

 Andy Montgomery is President of Ultra Yield Solutions – a national distributor of light-centric products and services to help growers and investors manage lighting, installation, controls, rebates, solar and energy storage, funding – the gamut of complexities associated with commercial photosynthesis. Contact Andy at andym@ultrayieldsolutions.net.