What’s the current landscape: There are already at least five national trade groups seeking to influence cannabis policy on Capitol Hill. In addition, there are longstanding marijuana legalization advocacy groups like NORML and Marijuana Policy Project, as well as lobbyists for individual cannabis companies and larger umbrella groups such as the ACLU and Human Rights Watch. As Congress focuses more attention on cannabis policy, some have pointed out that the lack of unity could hold back legalization efforts.
Hawkins says he hopes USCC can alleviate that problem.
The day after Democrats swept both Senate seats in the Georgia runoff election — giving them a slim majority and installing pro-marijuana legalization leaders in the upper chamber — Curaleaf Chair Boris Jordan decided to try something big.
“I literally called my bankers and I said, ‘Guys, I think this is going to be a big change. Let's do an [overnight] offering,’” Jordan recalled.
Curaleaf, America’s largest cannabis company, put over 16 million shares on the market overnight and brought in $300 million — in equity and debt sales — in under 24 hours.
Marijuana is still illegal at the federal level in the U.S. But that hasn't stopped the American pot industry from evolving. Individual states have been independently legalizing cannabis to various degrees: 33 and D.C. have made medical cannabis use legal for some conditions, while 11 and D.C. have made recreational cannabis use legal too. In November's election, a few more states have legalization proposals on their ballots.
The Sale-Leaseback Transaction Emerges in Cannabis
As capital availability has dried up cannabis companies have looked for alternatives to generate growth capital.
Several larger, vertically integrated operators have looked to their balance sheets to free up assets, in particular the real estate underlying their cultivation, processing and manufacturing businesses. The emergence of the “Sale-Leaseback” transaction in cannabis has arrived.
It’s important when looking at the numbers to understand that some of the growth is from acquisitions. Additionally, some of the companies were negatively impacted by closures in Massachusetts and Nevada during the quarter. Finally, any given quarter can be impacted by new dispensary openings or especially additional production capacity leading to more product availability. Some of the companies share “same-store sales” information, which helps to better understand the growth dynamics. GTI, for instance, saw 75% same-store sales growth from a year ago and 8% sequentially.
Financial analysis firm Cantor Fitzgerald released a report on Wednesday which estimates that Arizona, New Jersey, New York, Pennsylvania and Connecticut will legalize recreational cannabis sales in the next two years.
Analyst Pablo Zuanic calculates that these new states will add $3.5 billion in market potential for cannabis MSOs and other smaller players.
Cash is at a premium in the cannabis industry these days. For investors, it's an important consideration when investing in a pot stock because those without much cash on hand could be in for a rough ride, especially as the economy struggles.
Here are three U.S. pot stocks that reported less than $100 million in cash in their most recent earnings reports. Let's take a look and see if these companies have enough money given how much cash they're burning through and whether investors should avoid them for the time being.
1. Cresco Labs
The National Basketball Association and its players union have agreed that players will be tested for performance-enhancing drugs when the league restarts at Disney World, but not recreational drugs, CBS Sports reports. The NBA suspended its season amid the coronavirus pandemic and the league and union are finalizing details for a shortened, “bubble” season to finish to the year.
The proposal was first reported by Shams Charania of The Athletic.
Cresco Labs, a Chicago-based marijuana multistate operator, appointed Michele Roberts to its board of directors, making the executive director of the NBA players union the first person of color on the board.
The Cresco board currently consists of eight white men.
The announcement comes a few days after Cresco’s co-founder and former president, Joe Caltabiano, resigned from the board, thus cutting all executive ties with the company he helped found in 2013.
Things certainly did not go as expected in 2019 for the cannabis industry. It was expected to be a year of breakthroughs, with growth in Canadian recreational weed sales and additional U.S. legalizations pushing the broader industry toward profitability. But by year's end, the vast majority of cannabis stocks remained unprofitable, and pot stocks took a beating.