You’ve got to know when to hold ’em and know when to fold ’em – and it’s as true in cannabis as it is in poker.

The Cannabist Co. (OTC: CBSTF) surprised the industry this week when the company decided to fold ’em and said it was leaving Florida. The company seems justified in jumping ship as it lost roughly $4.8 million on around $6 million in revenues in the most recent quarter. In addition, Florida represented less than 5% of the company’s total revenue in the first quarter of 2024.

The Cannabist said its “asset base is not commercially optimized with more cultivation capacity than our retail locations require.” The company is selling 14 retail locations, three cultivation and manufacturing facilities, and its license.

All in

While The Cannabist is walking away from the Florida table, other MSOs have gone all in. Here’s what the current MSO landscape looks like:

• Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) has always seen its future in the state and just recently opened its 200th store there.
• Verano Holdings Corp. (OTC: VRNOF) is tapped into the state with 77 dispensaries using the MÜV store name.
• Ayr Wellness (CSE: AYR.A) (OTCQX: AYRWF) has planted its flag with 64 stores in the state.
• Curaleaf Holdings (TSX: CURA) (OTCQX: CURLF) is also quickly opening stores celebrating its newest in Miami making that 62 Florida stores for the company.
• Cresco Labs (CSE: CL) (OTCQX: CRLBF) is also in the state with 33 stores.
• Green Thumb Industries (OTC: GTBIF) just opened its 17th store in the state.

Mind you, the state is still a medical-only state at this time, though there have been many attempts to fully legalize cannabis to date.

This year it has become a ballot decision, but it requires 60% of voters in favor. Surveys are varied as to whether the state can get enough votes to pass the legislation, though the latest numbers show that voters may be lining up to just say yes.

However, it is a long way to the November elections and anything could happen.

Betting on hemp

What looked like a smooth path to adult-use legalization hit a bump when Gov. Ron DeSantis began campaigning against the bill and throwing his weight behind hemp instead. The state was pursuing a ban on unregulated hemp products, which compete against regulated cannabis products. The intoxicating hemp products aren’t tested and are often sold to minors.

Marijuana Moment reported that the governor may be hoping that if he helps the hemp people, they will help him defeat adult-use cannabis. The state Republicans have also aligned themselves with hemp versus adult-use cannabis.

All this to say, it’s a gamble to assume the state’s voters will approve adult-use cannabis. Plus, if it does get voted in, will the governor fight the efforts to establish a program?

What’s at stake?

BDSA analyst Brendan Mitchel-Chesebro posited that Florida could be the second-biggest market by 2028, with his prediction placing total sales at $870 million in 2025 if legalized and $4.5 billion by 2028 , which would surpass Michigan.

If legalization doesn’t go according to plan, more MSOs could find that they’ve invested heavily in a state that doesn’t want them and are in the same boat The Cannabist found itself in.

It’s a gamble they seem willing to take at this time.