Cresco
Cresco announced yesterday the decision to exit agreements under which Cresco Labs served as the exclusive distributor of certain third-party branded products in California. The decision marks the latest step in Cresco Labs' multi-year strategy to increase profitability and shift toward owned-brand distribution in the world's largest and most competitive cannabis market. The removal of most third-party brands results in a decrease in projected sales for the fourth quarter of 2021; the Company adjusts its previous Q4 2021 revenue guidance to a range of $235 million to $245 million. In addition, the Company reiterates its Q4 adjusted EBITDA guidance of at least 30% and gross margins over 50%. California became a foundational state for Cresco Labs early in 2020, as it began operating the Continuum distribution platform to bring a curated portfolio of leading brands to California retailers. "The progression of our distribution strategy has led to owned-brand FloraCal now consistently landing among the top-15 flower brands in California and Cresco Liquid Live Resin among the top-10 live resin brands."
Slang/Trulieve/Harvest
TCNNF completed the acquisition of Harvest. In addition, Slang has announced its entry into West Virginia and Pennsylvania with a strategic partnership with Trulieve. With these two states, Slang's products will be available in 15 different states, Canada and Puerto Rico. Under the agreement, Slang will receive royalties on branded products sold in Trulieve stores. Product launches are expected to begin in 2022. "Trulieve and SLANG have enjoyed a successful partnership in Florida, and as we expand nationally, we are excited to bring SLANG products into select new states," commented Valda Coryat, Chief Marketing Officer of Trulieve. "We recently announced the launch of SLANG in Massachusetts, and now we will add two more states within our northeast hub where patients will find SLANG products on Trulieve's shelves and available in dispensaries throughout those states as we build upon our wholesale distribution model." Slang Cannabis is traded under the ticker SLGWF.
Schumer's SAFE Comments
Chuck Schumer says he and his colleagues have an agreement that the body will not be taking up any cannabis banking legislation until a more comprehensive reform advances. The Safe Act is a much more bipartisan supported bill compared to Schumer's bill. Cory Booker has come out and stated that he would also not support Safe. Schumer has said he is open to advancing banking reform if lawmakers incorporate social equity provisions such as expungements to prior cannabis convictions. House Judiciary Committee Chairman Jerrold Nadler (D-NY) had this to say: "Why not let [banking reform] move forward while the long-term process of the legalization bill needs to work itself through?" Schumer had these comments to make: "Senators Booker, Wyden, and I have agreed that if we let [the banking bill] out, it'll make it much harder and take longer to pass comprehensive reform," Schumer replied. "We certainly want the provisions, similar to the SAFE Banking Act, in our bill. But to get more moderate people—to get some Republicans, to get the financial services industry—behind a comprehensive bill is the way to go. It's the right thing to do."
NV Tracker
July sales were released for Nevada, and they did not live up to expectations. The rest of the country saw significant (8-10%) sequential revenues, while Nevada saw only a 1.37% increase. After Nevada opened back up for business on March 21', sales have progressively declined. The annual run rate of sales is $1.12 Billion, which is down slightly from last month.
