Maryland Tracker
Maryland released their medical sales data for April and reported they had $47.8 Million in sales for the month. This is a slight decrease compared to last month and a 40.5% increase over the year prior. We are noticing slightly decelerating sales numbers for the slightly underserved state. The annual run rate for 2021 is $554 Million. The MSOs with the largest concentration in Maryland are TRSSF, VREOF, and HRVSF.
Green Thumb Acquisitions
There are currently four active cannabis licenses in the state of Virginia, and Green Thumb Industries is now a proud owner of one of them. The other three are owned by Columbia Care, Jushi, and a private company. Virginia is currently one of the most underserved markets in the US. With recreational sales to commence in 2024, this is an excellent acquisition to enter the Virginia market. This acquisition comes just days after Green Thumb raised $217 Million in debt for future growth, and we emphasized, acquisitions likely to come! The deal is valued at $82.5 million. In the press release, Green Thumb predicts Virginia to be a $1.5 Billion market upon maturity, which we think is slightly high because the current usage rate in the state is only 12.2%. This number will likely go up once adult-use sales commence, but we still expect sales to be around $1.1-1.3 Billion upon maturity. With its current investment in the NY market, this is a terrific acquisition in a currently severely underserved market, set GTI up for significant growth in 2023/2024 and beyond.
Hemp Prices Hit Rock Bottom
There are stockpiles of unsold hemp, which are weighing down the prices for the crop due to the enthusiasm of new farmers who hoped for a new lucrative market to enter. Farmers are being offered $1 per pound, which is about half as much it costs to produce for the crop. The hemp industry overestimated the demand for CBD in the US which led to this surplus. In the next few months, production will likely decrease significantly, and the market will go back to equilibrium. For now, though, farmers are left with large stockpiles of hemp, and CBD companies can obtain lower pricing for their raw materials.
