Will Inflation Stunt This Growth Industry?
With the Core Consumer Price Index (CPI) signaling an annual inflation rate of 8.6%, rising costs are the talk of the town for good reason. And while some growth industries might not feel the sting of inflation very sharply due to their pricing power, unfortunately the cannabis industry is likely to face new struggles.
The challenge of inflation is happening at a time when most of the major cannabis companies aren't profitable, which exacerbates the issue. And there isn't much hope for conditions to improve very soon. Will inflation be a brutal bugbear for the marijuana industry and prevent it from growing as quickly as investors expect?
Despite what some enthusiasts would suggest, cannabis products aren't necessary for people to live their daily lives. When inflation starts to squeeze wallets, discretionary purchases like marijuana will be the first to go, whereas must-have items like prescription medications and more mundane goods like toilet paper will be just as in demand as always.
Source Fool.com
