Positive Developments on Legalization
Yesterday, The Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act is sponsored by Reps. David Joyce (R-OH) and Don Young (R-AK). The main crux of the legislation is to federally deschedule cannabis—and it’s similar to past bipartisan proposals—but this one goes a few steps further with language on legal protections and mandates for federal studies into medical cannabis. However, it does not contain social justice provisions to repair the past harms of the war on drugs. Under the proposal, marijuana would be removed from the Controlled Substances Act, clearing states to enact legalization. Cannabis could be imported and exported across states, though transporting marijuana to states where such activity is unlawful would remain federally prohibited. Two agencies—the Food and Drug Administration and the Alcohol and Tobacco Tax and Trade Bureau, which falls under the Treasury Department—would be responsible for developing regulations for cannabis. Those rules would have to be “similar to federal rules regulating alcohol,” the text of the bill states, and they would have to be issued within one year of enactment.
Still, work to be done, but this is a step in the right direction.
Adult-use cannabis sales remain steady in Massachusetts, with revenues in the past two weeks of $24 Million each week. The annual run rate in MA is $1.14 Billion for just adult use. MA stopped reporting sales for a brief period last year, so the tracker does not display YoY sales data. Companies with the largest footprint in MA are CURLF, AYRWF, CCHWF, FFNTF, and ACRHF.
FFNTF, GTBIF, CURLF, and AYRWF are on our long list.
Green Thumb Earnings
GTBIF is a LONG
GTBIF reported a strong quarter with revenues of $194.4 Million with a sequential increase of 9.7% and an 89.5% increase YoY. This beat consensus estimates of $188.2 Million. They also beat the adjusted EBITDA number, which was $71.4 million compared to the $68 Million consensus. Same-store sales were up 35% in the quarter. The top three trending states during the call were NY, VA, and CA. We will have more details in a separate note.
Top MSO by State
Curaleaf has a strong control of the northeast, and Cresco Labs has a strong presence in the Midwest while the rest of the market remains fragmented, with different MSOs having control. Trulieve will soon get access to the west with their acquisition of Harvest Health which currently dominates both North Dakota and Arizona. As the US market grows, expect this graphic to evolve into fewer colors as the larger players acquire more targets.