Week In Review: Earnings Season; Verano Holdings Financial Highs & Lows in 2023; Trulieve Claims $113M Tax Refund; New Mexico Advances Psilocybin Research with Memorial Legislation

LOS ANGELES–Welcome to the far too-exciting world of cannabis and psychedelics, where it’s earnings season with updates from some of the leading MSOs outlined below.

Capital Markets: Positive Quarterly Earnings from Leading Cannabis Companies Amidst Sector Volatility

In a recent surge of positive financial results, Green Thumb Industries (CSE: GTII, OTCQX: GTBIF), Trulieve Cannabis Corp (CSE: TRUL, OTCQX: TCNNF), and Verano Holdings Corp (NEO: VRNO, OTCQX: VRNFO) reported quarterly earnings that exceeded analysts’ expectations. These reports come at a crucial time for the cannabis industry, which continues to face regulatory challenges and market saturation.

Green Thumb Industries showcased a remarkable performance by beating both revenue and Adjusted EBITDA (AEBITDA) consensus estimates. The company’s success is attributed to its strategic expansion and focus on high-margin products, demonstrating its operational efficiency and profitability.

Trulieve Cannabis Corp also surpassed expectations in revenue and AEBITDA, reinforcing its market leadership, particularly in Florida. Trulieve’s growth strategy, driven by strategic acquisitions and customer loyalty, has been key to its strong financial outcomes.

Verano Holdings Corp exceeded revenue forecasts, highlighting its effective market penetration and sales growth. Although AEBITDA details were less emphasized, Verano’s performance indicates a solid operational framework and commitment to product quality.

Despite these positive individual company performances, the broader US cannabis market faced challenges, as evidenced by the US cannabis MSOs ETF, which fell 7.80% last week, marking its third loss in the last four weeks. This trend reflects the ongoing volatility and uncertainty within the sector, even as certain companies manage to achieve significant financial milestone

Business News

#1. Verano Holdings Financial Highs and Lows in 2023; Verano Holdings, a player in the cannabis industry, showcased a mixed financial performance for the year ending December 31, 2023. The company reported a significant revenue uptick, reaching $938 million, marking a 7% increase from the prior year’s $879 million. This growth underscores Verano Holdings’ expanding footprint and operational success across multiple states.

#2 Utah Lawmakers Push for Protections for Medical Cannabis Patients: In a significant legislative push, two key Utah state lawmakers are spearheading a bill aimed at safeguarding the rights of medical marijuana patients against discrimination by local governments. This initiative follows the 2018 approval of medical cannabis use by Utah voters, a measure that garnered nearly 53% of the vote, illustrating a shift towards recognizing cannabis as a legitimate medical therapy.

#3. Ukraine Embraces Medical Cannabis: A New Frontier in Healthcare: On February 15th, Ukrainian President Volodymyr Zelenskiy inked his signature on a bill that legalized the medical use of cannabis, as revealed by a parliamentary database on Thursday. This pivotal move followed advocacy from lawmakers and medical experts, who highlighted the urgent need for cannabis-based medication, particularly for more than 6 million individuals, including cancer patients, civilians grappling with post-traumatic stress disorder, and wounded soldiers.

#4. If you think we have it bad in USA cannabis, new reporting from Matt Lamers in MJBizDaily shows unpaid taxes from Canadian cannabis producers surged by 72% year over year, reaching $202 million. As of December 29, approximately 259 license holders were in arrears with their tax obligations, according to information disclosed to MJBizDaily by the CRA.

#5. Trulieve claim to have essentially eliminated 280e which has caused a frenzy of activity in the industry on how they pulled off a IRS tax refund of $113MM

#6. Vangst Recruitment released their latest salary guide which includes information such as:

• A hiring revival is anticipated later in 2024, with 86% of surveyed cannabis companies planning to expand hiring in core areas.
• High-value employees experienced significant pay increases, with top-end salaries rising by 4.7%, outpacing the 4.1% average increase in non-cannabis industries.
• Talent mobility remains a challenge, with many cannabis employees seeking career advancement opportunities, leading to increased job transitions within the industry.

#7. Nabis, the licensed cannabis wholesale platform, announced its acquisition of Blackbird, the premier Nevada-based distribution solution. This transition will bring Nabis’ technology, infrastructure and  brands to Blackbird’s network of Nevada operators and retailers, streamlining efficiencies for operating partners throughout the state’s supply chain.

See our review of the Benzinga Market Spotlight here. 

Psychedelic Market Highlights:

#1.New Mexico Advances Psilocybin Research with Memorial Legislation: In a significant move toward exploring alternative therapeutic treatments, New Mexico Governor Michelle Lujan Grisham has signed Senate Memorial 12 (SM-12), initiating a comprehensive study on the therapeutic potential of psilocybin, the psychoactive compound found in certain mushrooms. The memorial, distinct from typical bill proposals, mandates the New Mexico Department of Health and the University of New Mexico to investigate psilocybin’s efficacy and outline regulatory frameworks for a potential therapeutic program.

#2 Barcelona to Host Landmark International Cannabis Business Conference in Partnership with Spannabis: Barcelona, renowned for its vibrant cannabis culture and history, is set to host the next edition of the International Cannabis Business Conference (ICBC) on March 14, 2024. This event marks a significant partnership with Spannabis, Europe’s leading cannabis expo, creating what is poised to be the world’s largest cannabis superconference. The collaboration underscores the growing importance of the cannabis industry on a global scale, offering unparalleled opportunities for networking, education, and policy discussion.

Hall of Flowers Cannabis brands & business exposition March 13 & 14; Ventura, California

InternationalCBC Cannabis business exposition 14 March, Barcelona Spain

The Cannabis Summit European Cannabis networking event; 11-12 April 2024

More dates are added regularly so follow Highly Capitalized for more information.

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