Veritas Fine Cannabis Closes Cultivation Facility, Lays Off Employees
THOMAS MITCHELL JUNE 23, 2022 10:19AM
Veritas Fine Cannabis has closed one of its three growing facilities and laid off almost a quarter of its employees.
After rumors of Veritas layoffs began circulating on social media earlier this week, Veritas president Jon Spadafora confirmed the move.
"Having to close one of our indoor cultivation facilities and say goodbye to 33 incredibly talented and dedicated members of our team was truly gutting. As difficult as the decision was to move forward with the facility closure, we are focused on maintaining the rigid quality standards Veritas cannabis is known for and supporting our retail partners statewide," he says.
Veritas, one of Colorado's largest marijuana cultivation brands, began facing challenging issues along with much of the rest of the industry last fall.
"The current economic climate is a huge factor. When gas prices are reaching $5 a gallon or more and grocery store prices continue to climb, people are forced to adjust their household budgets — but at least cannabis prices aren’t rapidly inflating like we’re seeing with other commodities," Spadafora adds. "This is good for cannabis consumers, but it’s nevertheless challenging for industry operators, as sales volumes are also down in recent months."According to the state Marijuana Enforcement Division, the average wholesale price per pound of marijuana has fallen by almost 60 percent since January of last year, while monthly Colorado dispensary sales have decreased for eleven straight months on a year-over-year-basis. Veritas is one of a handful of marijuana businesses to publicly scale back in recent months; others include Pure Greens, Bonfire Cannabis and the ownership group behind Buddy Boy dispensaries.
Like other marijuana business owners and executives, Spadafora notes that more states have caught up to Colorado's marijuana shopping experience in recent years, and tourism dollars are declining as a result. Arizona and New Mexico are among the nineteen states that have legalized recreational pot, while Oklahoma's medical marijuana program is one of the most liberal in the country, with no cap on dispensaries.
"The status of today’s cannabis market is the result of a few events, one of which is certainly recent industry expansion. For the last three years, we have only known a market that did not have enough supply, so I think it is fair to say that many companies in the state expanded their capacity," Spadafora says. "Legalization in other states is having an effect as well. As cannabis becomes a normal part of many people’s daily routine, the novelty of visiting a legal state wears off. Visitors probably purchase a smaller amount when they come to Colorado now, since they can also purchase when they get home."Founded in 2017, Veritas was an early branded, stand-alone growing operation in the state. The company previously grew marijuana for Cookies, one of legal marijuana's largest marijuana brands, but the two are no longer partners, according to both companies.
Olio extracts and Higher Grade, a chain of Denver dispensaries, share common ownership with Veritas, but Spadafora says that all three are separate business entities, and the recent moves "only affected Veritas operations." No further changes at Veritas are planned at this time, he says, adding that executive pay cuts and operational adjustments have also been implemented to save more money.
"While this has been a difficult week for our team, we are confident that the future is full of opportunities. The market will rebound, and the best operators will continue to produce amazing cannabis products," he concludes.