Dispensary closures highlight the cannabis industry’s ongoing struggles.

Cannabis retailer Urbn Leaf’s Seaside dispensary is the latest to fall victim to the challenging business conditions facing the industry after shutting down late last month.

Statehouse Holdings, Urbn Leaf’s parent company, decided not to renew the Seaside location’s cannabis license and closed the store, at 680 Broadway Ave., on Aug. 26, according to Statehouse’s second-quarter financial statements. Urbn Leaf was one of three dispensaries on Broadway Avenue and one of six in Seaside and neighboring Del Rey Oaks, making the area a local hotspot for cannabis purveyors since Seaside began permitting dispensaries in 2017.

Urbn Leaf and its landlord had invested around $1 million into building out a sleek storefront and 6,400-square-foot retail space and upgrading the building’s infrastructure, says Peter Baird of Mahoney & Associates, the property’s landlord and listing brokerage.

Yet Statehouse has been dealing with many of the same headwinds that have impacted the cannabis sector at large – namely, overproduction that has hurt prices, illegal-market competition that has hindered sales, and taxes and regulations that industry players claim have made it difficult to turn a profit.

In its second-quarter earnings report, Statehouse disclosed quarterly revenues that were down 27 percent year-on-year, including retail revenues that fell 30 percent from the previous year. The San Diego-based company reported a net loss of $2.1 million in the quarter, which coupled with a heavy debt load has seen its publicly traded stock sink to under $0.07 per share. (Representatives for Statehouse did not return requests for comment.)

Statehouse’s challenges are in no way unique, according to its competitors. “Nobody is going to survive this – it’s an armageddon,” says Mike Bitar, co-founder and CEO of Salinas-based cannabis company Grupo Flor.

Grupo Flor’s East of Eden dispensary chain recently closed its Moss Landing location; while the chain still has four locations open, Bitar says, “We’ll be lucky to have maybe two [open stores] by the end of the year.” Grupo Floor laid off 120 employees this spring and cut back operations at its Salinas processing facility, he adds.

“Financially, it’s just hard – there’s no capital, vendors aren’t paying [each other], people are behind on taxes and rent. The whole industry is imploding,” Bitar says. “I’m getting calls once a week where operators are saying, ‘Here are my keys, take over my dispensary.’”