Colorado Taxes
In anticipation of federal legalization (their words, not ours), Colorado officials discuss lowering state cannabis taxes to prevent companies from fleeing to lower-tax states. Under the CAOA, the terminal tax rate would be an outlandish 25%, besides the already existing local and state taxes. In addition, the state aims to lower the excise tax on wholesale transactions, which will encourage growers to remain or flock to their state. The current 15% excise tax was responsible for nearly $101.5 million in 2020. The state could replace the lost revenue with higher sales taxes.
Cresco FL
Cresco, operating under the name Sunnyside in Florida, opened its 40th dispensary nationwide. The dispensary location is in Oakland Park, Florida. This location marks its 11th location in Florida and second in Broward County. Cresco has historically remained in the northeast but has started expanding into Florida. The dispensary is near a Publix supermarket and minutes away from the I-95 highway, making it very accessible to daily commuters. "We've proven in both adult-use and medical markets like Illinois and Pennsylvania that when consumers have a choice, our products are some of the most sought-after.
I look forward to expanding access to these products across the state of Florida and taking market share," said CEO Charlie Bachtell.
GTBIF Moves
GTBIF is USA Long.
Green Thumb Industries were down 6.3% on the day yesterday. This comes after the poor performance for the past two months, where it has dropped 31% compared to the MSOS, which has dropped 18% in the same time frame. While we continue to believe GTBIF is one of the best-positioned companies in the space, the company has a larger number of facilities in Pennsylvania and other states that are seeing a slowdown in sales. Our PA tracker posted monthly, sales were down 5% in September, with a consistent deceleration since April of 2021. Green Thumb's is a well-diversified company with operations in limited-license states like Illinois, Nevada, New York, and New Jersey. More importantly, with sales in N.Y. and N.J. starting up within a year, this drop is an excellent buying opportunity.
TILT Holdings Inc.
TLLTF, a Hedgeye LONG, has entered into definitive agreements to sell all of the assets of Sante Veritas Therapeutics, Inc., an inactive wholly-owned subsidiary of TILT, to Meridian 125W Cultivation Ltd substantially. "ultimately" for approximately C$900,000 in cash and the proceeds will be used to resolve outstanding liabilities (the transaction closed upon signing.)
"Last year, we realigned our strategy to focus on our core businesses and invest in our high growth operations in the U.S.," said CEO Gary Santo. "As a result, we divested non-core assets like Sante Veritas, which no longer aligned with our new strategy and future growth plans. We look forward to continuing to execute across the business as this transaction marks the final non-core asset sale in our portfolio."
Are there more asset sales to come? We contend that the company could sell its Jupiter business and new more than 100% of the company's equity value.
