With all eyes on the D.C dysfunction to see if Congress can kick the can a few more months—the House scheduled Tuesday’s vote at 4:20PM, I sh*t you not— U.S. cannabis earnings continue to filter through the marketplace with varying levels of success.
The eleven U.S. plant-touching cannabis companies with BBG revenue estimates have $12.65B in aggregate enterprise value against ~$8B in est. ‘24 revenues and ~$9B in est. ‘25 revenues. This comes, of course, after most of the industry reigned in their capital expenditures to generate the free cash flow necessary to navigate the status quo.
Obviously, there are extenuating circumstances surrounding U.S. cannabis investing including but not limited to
eye-gouging onerous taxation and the inability to custody stocks, both of which remain frustratingly in place as we continue along this journey.
Insofar as there is real change afoot, however, the time to pay attention is now, which is why we spend so much time highlighting companies that are in the arena fighting for their
life place on the right side of history.
While not every U.S. canna company put up 24% sequential growth like TerrAscend just did—more on that below—we expect Growth at A Reasonable Price (G.A.R.P) to emerge as a familiar rallying cry on the other side of normalization.
A New York Minute
A lawsuit against NY cannabis regulators that had stalled the opening of new legal weed dispensaries has been resolved, opening the door to the resumption of the long-delayed rollout. The settlement, which has yet to be finalized, could allow MSOs to begin selling into wholesale channels in the coming weeks ahead of their December retail launch.
[that last bit wasn’t in the article linked below; we heard it from someone close]
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Separately, NY legislators officially sent a bill to the governor that would provide tax relief to NYC marijuana businesses that are currently blocked from taking federal deductions under daddy’s nemesis, IRC 280E.
“This modification to income is appropriate because while the expenses of cannabis-related business cannot be deducted for federal purposes, New York law permits and encourages these businesses akin to any other legitimate business occurring in the State.”
Across the River
The New Jersey cannabis market is on its way to becoming a billion-dollar business. From July ‘22 through June ‘23, state dispensaries sold more than $734M in cannabis products, according to statistics from the NJ Cannabis Regulatory Commission, with most …