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The four MSOs that could get buzzed on Ohio

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With the Ohio adult-use cannabis sales set to launch in a matter of weeks, four multistate operators stand poised to reap significant benefits from the new market.

That’s according to equity analyst Pablo Zuanic of Zuanic & Associates, who reviewed the current landscape and the four MSOs.

Zuanic expects sales to begin July 1, just in time for the Fourth of July, which is typically a strong holiday for cannabis sales. Ohio is also expected to benefit from having very few neighbors with legal recreational markets – with Michigan the notable exception. That means it will likely draw customers from border states that have yet to see the light.

The analyst estimates that total cannabis sales – meaning both adult-use and medical – to reach $2.3 billion by the end of year. That’s based on a sales projection of $200 per capita. In the first five months of 2024, medical sales topped $205 million, according to data from the state’s Division of Cannabis Control.

Currently, the state has 123 operating medical dispensaries, plus nine  with “active provisional” dispensary licenses. By mid-2025, Zuanic forecasts that the state will have 254 adult-use dispensaries.

Ohio market

According to Zuanic, 42 of the 123 operational stores (34%) are owned by public MSOs:

  • Acreage Holdings – 5 stores, operating under The Botanist brand
  • Ascend Wellness Holdings – 5 stores
  • The Cannabist Co. – 5 stores, four under the Columbia Care banner and one under gLeaf
  • Cresco Labs – 5 stores, operating as Sunnyside
  • Green Thumb Industries – 5 stores, under the Rise banner
  • Verano Holdings – 5 stores, operating as Zen Leaf
  • Vext Science – 4 stores (two consolidated and two under letters of intent)
  • Ayr Wellness – 3 stores
  • Curaleaf – 2 stores
  • Jushi Holdings – 1 store
  • MariMed – 1 store
  • Trulieve Cannabis Corp. – 1 store

In addition, Zuanic noted, TILT Holdings has a processing license, but no cultivation or retail operations in the state.

As with other states, location will likely be a major factor in terms of success, the report pointed out several times. Existing license holders could benefit from having a head start.

However, Zuanic wrote, “it is unclear at this stage if incumbents will be able to choose locations for their next stores or if a lottery system will apply.” Such allocation mattered in Michigan and would likely be a critical issue in Ohio as well.

Of the 12 MSOs already operating cannabis stores in the state, four far surpass the others with regard to their potential for value creation. These include:

  • Vext (potential of a 471% increase in company value) – Vext holds four retails licenses in Ohio, and the company also has an operating cultivation facility with an initial 25,000 square feet fully built out. The first harvest from the facility was achieved in the first quarter of 2023. Vext anticipates the opportunity to operate seven dispensaries in the state when all is said and done. The company currently has a market cap of $45 million, which means it has room to grow. (It should be noted that Vext hired Zuanic to increase its profile).
  • Acreage (275%) – Acreage has a total of seven licenses in the state: five dispensaries, one cultivator, and one manufacturer. The company had planned to sell these assets, but changed its mind. Like Vext, Acreage also has a market in the low $40 million range.
  • The Cannabist (185%) – The Cannabist has five active dispensary licenses plus one cultivator and two manufacturer licenses. It has a much higher market cap than the previous two MSOs, coming in at $107 million. The company also lists Ohio as being one of its top five markets.
  • Ascend (62%) – Ascend has five medical retail licenses, including the pending acquisition of Ohio Patient Access, and one cultivation/processing license. The company said it expects to open more stores. Ascend has a $219 million market cap.

While Zuanic’s report only briefly mentioned the other state leaders – Green Thumb, Verano, and Cresco Labs, each with five stores in operation – he did note that Cresco and Green Thumb typically outperform in the wholesale market in other states.

He also projected that Green Thumb and Cresco Labs would likely grow to eight stores each.



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Acreage Holdings

The Daily Hit: November 25, 2024

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The Daily Hit is a recap of the top financial news stories for Monday, November 25, 2024.

On the Site

Creditor asks California court to appoint receiver for Gold Flora, citing ‘dire liquidity issues’

The request stems from debts purchased from the now-defunct cannabis distributor Herbl.

Read more here.

Minnesota judge delays cannabis license lottery after four lawsuits filed against state

It’s not clear when the lottery may now be held, or when cannabis licensing may restart.

Read more here.

Acreage says fixed shares worth zero in Canopy USA deal

The company would need to see Canopy’s stock rise above $5 for fixed shareholders to receive any value.

Read more here.

Cake Brands the latest target for a hemp class action lawsuit

California-based Cake reported $44 million in sales over a nine-month period in 2021.

Read more here.

Illicit cannabis, imported CBD targeted by new rules from Michigan state regulators

Michigan regulators proposed 96 changes to the current legal cannabis framework.

Read more here.

Cannara revenue surges 43%, nets profit in fiscal 2024

Sales were driven by Quebec market share gains as the Canadian cannabis producer continues to expand its canopy.

Read more here.

In Other News

Cannabis advertising

A federal appeals court has upheld Mississippi’s ban on medical marijuana advertising on Friday, rejecting arguments it violates the First Amendment.

Read more here.

Kentucky

Kentucky’s Office of Medical Cannabis and Gov. Andy Beshear announced the first group of 36 dispensary business license winners for most commonwealth counties in a lottery drawing Monday afternoon.

Read more here.



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Acreage Holdings

Canopy Growth finalizes Wana Brands acquisition after three years

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The deal includes Wana Wellness LLC, The CIMA Group LLC and Mountain High Products LLC.

Ontario-based Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) announced Wednesday that it has, at long last, completed the acquisition of U.S. marijuana edibles company Wana Brands, nearly a full three years after the $279 million deal was first announced.

“Canopy USA now owns 100% of the outstanding equity interests in Wana,” the company said in a press release, indicating its full intent to expand into the U.S. cannabis market. “Canopy USA is fulfilling its ambition of establishing a leading brand-focused cannabis company in the U.S.”

Canopy USA, a subsidiary of Canopy built specifically to ease the company’s U.S. entrance from Canada, now fully owns Wana Wellness LLC, The CIMA Group LLC and Mountain High Products LLC, which collectively comprise Wana Brands.

Canopy USA has also been on an acquisition spree for months, snapping up two other big-name companies, including California-based Jetty – of which Canopy USA owns 75% – and New York-based multistate operator Acreage Holdings Inc. (CSE:ACRG.A.U) (OTCQX:ACRHF) – a deal that is not expected to close until next year – all to position itself for a splashy entrance into U.S. marijuana.

“With Wana now part of Canopy USA alongside Jetty, Canopy USA is gaining momentum while reinforcing its commitment to building a diverse portfolio of industry-leading brands in the U.S. cannabis market,” Canopy CEO David Klein said in the release this week.

In addition, Wana Brands has expanded into the intoxicating hemp sector with its hemp-based edibles line Wanderous, Wana CEO Joe Hodas said. That should give Canopy USA even more flexibility in the national cannabis market.

Still, Canopy has continued to struggle financially, and reported a net loss of C$127 million in the second quarter of 2024, after losing C$129 million in the first quarter.

Leadership at both Canopy and Wana has also been shifting. Wana founder Nancy Whiteman announced her departure earlier this year, and Klein intends to step down from the helm of Canopy by March.



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Acreage Holdings

The Daily Hit: September 16, 2024

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New from: US Census Bureau, Ohio, High Tide, Colorado and more.

The Daily Hit is a recap of the top financial news stories for Monday, September 16, 2024.

On the Site

States’ coffers filling with cannabis tax revenue

The East Coast leads the country in cannabis tax collection growth.

Read more here.

Companies look for some leeway with Ohio’s restrictive cannabis advertising rules

Ohio is currently one of the most restrictive markets in the country when it comes to advertisements around legal marijuana.

Read more here.

Acreage gets a new lender and pays off the old

Despite the financial maneuverings, Acreage continues to face a mountain of debt.

Read more here.

High Tide revenue tops C$131M in third-quarter beat

The strong performance comes amid High Tide’s ongoing expansion efforts.

Read more here.

Colorado July cannabis sales second-highest of 2024

So far in 2024, only March has recorded higher sales.

Read more here.

Michigan August cannabis sales near $300 million despite Ohio launch

August’s sales were up 3% from July and increased even in regions that border Ohio.

Read more here.

In Other News

Akanda Corp.

Akanda Corp. has obtained a license for hemp cultivation in Canada. This license is directly tied to Akanda’s previously announced agreement with 1107385 B.C. LTD, further advancing the company’s strategic initiatives in the Canadian cannabis market.

Read more here.

Leafly

Leafly has entered into a new partnership with the New York Cannabis Retail Association, a nonprofit coalition of New York dispensary owners. Leafly and NYCRA will sponsor a series of industry events in 2024 and implement marketing initiatives designed to strengthen New Yorkers’ awareness of the importance of buying legal and local cannabis.

Read more here.

Nebraska

A former state senator who is also a former State Board of Health member filed a legal challenge Thursday seeking to invalidate two Nebraska ballot petitions related to medical cannabis.

Read more here.



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