Leading Cannabis Players Target Growth Markets To Offset Falling Prices
August 15, 2023A number of the major players in the cannabis industry reported earnings in recent days for the quarter ended June 30. First up is Chicago-based Green Thumb Industries, which reported a 2% sequential gain for the period as revenue rose to $252.4 million. Revenue for the first half of the year was up 1% to $501 million. Gains in growth markets like New Jersey, Virginia, and Connecticut were somewhat offset by continued price compression, which the company tried to combat through operational efficiencies and routing CPG business through Green Thumb’s Rise retail chain. To that end, six Rise locations opened during the quarter: two in Pennsylvania, two in Virginia, and one each in Minnesota and Nevada.
New York-based Curaleaf reported a sequential net revenue gain of 1% in the same quarter. Net revenue reached $338.6 million, up 4% from a year ago, excluding discontinued operations. Highlights for the quarter included the acquisition of Deseret Wellness in Utah; the addition of two retail locations in Florida, bring the company’s count to 60 in the state and 152 nationwide; the launch of the Curaleaf mobile app; the launch of the Grassroots brand in Florida; and the launch of the Jams edible line in Arizona, Florida, and New Jersey.
“As the U.S. industry regains its supply-demand equilibrium and we eagerly anticipate the game changing catalysts on the horizon, we continue to control costs and remain focused on long-term growth opportunities,” said Curaleaf chairman Boris Jordan. “We remain committed to the long game and will continue to position the company globally for years of robust growth and margin improvement in ’24, ’25, ’26, and beyond.”
Meanwhile, Tallahassee, Florida-based Trulieve reported $282 million in revenue, down 1% sequentially and 10% year-over-year. As an almost purely retail operation, 96% of Trulieve’s earnings came from its retail sales. In another telling indication of the price compression dogging the industry, Trulieve’s dollar declines came even as volume of branded product grew 9% to 11.6 million units. The company also exited its California operations and commenced a wind-down of its Massachusetts business, incurring various charges and impairments resulting in a reported net loss of $404 million. Trulieve continued opening retail outside its home state, with approximately one-third of its 186 locations now situated outside of Florida.
Finally, Ontario-based Canopy Growth reported net revenue of C$108.7 million ($82m) for the quarter, up 3% from a year ago. The company has undertaken a slash-and-burn approach to cost-cutting over the past year, having divested its national retail operations, closed eight cultivation facilities, and outsourced its vape, beverage, and edible production to third parties. Its Canadian cannabis business generated C$38.6 million ($29m), down 26% from a year ago. Its BioSteel CBD sports drink unit performed well, growing 137% from last year to C$32.5 million ($24m); however, Canopy is mulling a sale of this one bright spot “in order to remove the cash burden to Canopy Growth as quickly as possible.”—Danny Sullivan
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