While 98% of cannabis sales in Florida are through multi-state operators like Trulieve, many are playing just a minor role in California’s massive marketplace, writes New Cannabis Ventures.
Of the top 12 MSOs, just three are playing a major role in California’s more than $4 billion market: Cresco Labs, Columbia Care and TerrAscend.
Jushi is playing a moderate role, and five — Curaleaf, Green Thumb, Trulieve, Verano and Harvest Health — have a minor role. Three companies, Ascend Wellness, Ayr Wellness and iAnthus are not participating at all.
The case for consolidation
Acquisition prices are “rather low,” argues Alan Brochstein, so why aren’t these larger MSOs moving in? Smaller MSOs like MedMen and Plus Products have a growing presence in the state, and so do single state operators like The Parent Company and Lowell Farms.
Revenues have also spiked. Sales in April grew by 42% compared to last year, according to BDSA.
Trulieve’s acquisition of Harvest could lead to an expanded “Western Hub,” and Curaleaf could also increase its presence. GTI, however, has expressed hesitance.
“For those investors who want exposure to what many call the largest cannabis market in the world, there are many options, but some are more leveraged than others,” writes Brochstein. “There are several pure-plays, some of which could be acquired in the future, and there are a few MSOs with meaningful positions in the state already.”