Florida-based Cansortium (CSE: TIUM.U) (OTCQB: CNTMF), which does business as Fluent, has finalized its megamerger with New York-based RIV Capital, (CSE: RIV) (OTC: CNPOF), creating a new multistate operator that has a footprint in four states with 42 operational dispensaries.

The move gives Cansortium immediate access to New York, one of the fastest-growing legal marijuana markets in the nation, along with its existing portfolio of cannabis shops and grows in its home state, Pennsylvania and Texas. The company now owns eight total cultivation and processing facilities, which it said in a press release would allow it to bolster the Fluent brand even more going forward.

The company reportedly has $33 million in the bank with which to finance further acquisitions, it said in a Thursday announcement.

Another major winner in the deal is Scotts Miracle-Gro, which has a sizable stake in RIV Capital through its subsidiary The Hawthorne Collective. Existing shares will be converted into 1.245 shares of the newly formed Fluent, eliminating $160 million in company debt.

Shareholders of Cansortium will own 51.25% of the new Fluent, while shareholders of RIV Capital will own 48.75%, the company said. The company will continue trading under Cansortium’s existing ticker symbols on the Canadian Securities Exchange and the Over-The-Counter markets.

Cansortium CEO Robert Beasley will continue to lead the new company, and RIV Capital interim CEO David Vautrin will serve as the new company’s chief commercial officer.

Beasley said in the release that Fluent intends to scale up wholesale operations in New York to boost its Moods brand of marijuana products and “gain additional shelf space in dispensaries across the state,” which he said has “immense potential.”

The merger could prove key to the long-term prospects for both Cansortium and RIV Capital. Cansortium posted an $11.7 million net loss for the third quarter of 2024, and RIV Capital reported a $63.4 million net loss for the same period.

“Looking ahead, we remain focused on sustainable, long-term growth and will continue to drive efficiencies across all areas of the business to achieve our profitability and cash generation goals,” Beasley said.

Two years after its rocky start, New York’s legal cannabis market may be finally hitting its stride, with monthly sales soaring to $131 million across 215 dispensaries – a big shift from the single store that opened its doors in Manhattan’s East Village in late 2022.

The surge has created an unusually concentrated market where local brands are thriving and commanding premium prices, according to a new analysis from cannabis research firm Zuanic & Associates. While New York dispensaries remain sparse versus other legal states – just 11 stores per million residents versus California’s 32 – they’re proving remarkably productive, averaging $7 million in annual revenue per location.

“New York’s legal rec cannabis market is now at a $1.6 billion run rate,” Pablo Zuanic, the firm’s lead analyst, said. He acknowledged the recreational market’s challenges with red tape, illicit competition, and limited product selection but pointed to the market’s recovery in recent quarters​.

Local players have carved out strong positions across product categories. In flower, which makes up 35% of sales, homegrown brand Dank By Definition leads with 12.5% market share and charges a hefty premium at $14.12 per gram. But it’s facing growing competition from PharmaCann, one of the largest private multistate operators, whose LivWell and Matter brands have captured 18% of flower sales by targeting more value-conscious consumers.

The edibles segment tells an even more interesting story about brand power. Local manufacturer Off Hours commands nearly a quarter of sales, while California transplant Kiva has successfully exported its popular Camino brand to capture 19.4% of the market. That level of brand concentration – with top players controlling 40% or more of certain categories – is unusual for such a young market.

The combination of strong pricing and brand loyalty could attract more established cannabis companies looking to break into New York, either directly or through brand licensing deals. While most large multistate operators have limited presence here so far, the success of out-of-state brands like Kiva’s Camino in edibles and Rove in vapes shows there’s room for newcomers who understand the market’s premium positioning.

“Given strong pricing in the legal New York cannabis market, higher than normal brand concentration (for a new market), and what we would characterize as still volatile market share trends, we see an opportunity for MSOs to eventually build presence in the state,” Zuanic noted. “If they can make it there…”​