Virginia becomes #16
The Virginia legislature approved adult-use marijuana this past weekend. Virginia is the 16th state to legalize recreational cannabis and the first in the South. Sales will not start until 2024. Adults would be allowed to possess up to one ounce of marijuana. Only two other states have passed legislation to legalize cannabis. Virginia recently passed a marijuana decriminalization bill, and medical sales have recently started. The bill prioritizes business licenses for individuals deemed to have been disproportionately impacted by criminal enforcement. The bill sets a 21% excise tax and allows municipalities to add another 3% on top of sales taxes. Maryland's legislature has recently taken up legalization.
Market share trends in Florida (TCNNF, AYRWF, CURLF, GTBIF, CCHWF)
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday.
For the week ending February 26th, the number of qualified patients in Florida’s medical marijuana program grew 1.2% WoW to 497,068 qualified patients with active ID cards. Sales continued their surge in the past week, driven by Trulieve and Liberty Health Sciences. Trulieve's medical marijuana volumes increased 12% over the prior week, which was up 20% from the week before. Liberty Health Sciences grew 40.5% from the prior week. Trulieve and Liberty both added two dispensaries in the past week. Ayr Wellness' acquisition of Liberty Health Sciences closed on February 26th, but it appears that Ayr Wellness has been discussing changes in strategy before the deal closed. THC in mgs sold increased 16.1% WoW to 206.8 million mgs, CBD in mgs sold increased 21.4% WoW to 5.6 million mgs, and flower in oz. sold increased 5.2% WoW to 59,604 oz. sold.
Florida’s medical marijuana marketplace has strong potential – the state’s medical marijuana program still has a runway for population penetration, edibles were just introduced to the market in August, and there’s a broad range of qualifying medical conditions, notably ‘severe and chronic pain.’ The rising tide that is patient volume growth lifts all ships.
IRS Preferrs legalization
The head of the Internal Revenue Service (IRS) told Congress last week that the federal agency would “prefer” for state-legal marijuana businesses to be able to pay taxes electronically, as the current largely cash-based system under federal cannabis prohibition is onerous and presents risks to workers. During an oversight hearing before the House Appropriations Financial Services and General Government Subcommittee on Tuesday, IRS Commissioner Charles Rettig was asked about the lack of banking access for marijuana businesses and what steps could be taken to normalize the market. Rep. David Joyce (R-OH), who serves as a co-chair of the Congressional Cannabis Caucus, said that barring marijuana companies from traditional financial services is “inefficient for business and the IRS alike, obviously, not to mention ample opportunity for fraud and abuse it creates, as well as the potential for criminal acts as far as robbing and stealing from those.”
“It’s a security issue for the IRS."
