Share prices of publicly traded cannabis companies have plummeted over the past year Investor sentiment is largely dependent on news of federal cannabis legalization, Cantor Fitzgerald analyst Pablo Zuanic said in his recent note.
What happened
The analyst took a closer look at sales trends in 10 states, where some of the multi-state operators, such as Cresco Laboratories CRLBF, curaleaf Holdings Inc KURLF, Green Thumb Industries Inc GTBIF and Trulieve Cannabis Corp TCNNFoperate.
The deteriorating growth trends are evident in Illinois, Pennsylvania, Florida, Arizona, California, Ohio and Maryland, Zuanic said, adding that the markets in Massachusets, Michigan and Nevada are exceptions to this rule.
“The hard data for 3Q22 does not look encouraging so far,” he said.
More verticalization
in the In response to retail pricing pressures, state producers in Illinois and Pennsylvania opted for more verticalization, with retailers shelving more of their own products.
Illinois seen A 4.6% sequential decline in August marijuana sales to $129.4 million after July broke a record for the largest monthly sales year-to-date.
“Despite the lack of growth IL remains one of the Rec states with the most attractive economy‘ said Zuanic. In addition, the state recently issued a total of 185 cannabis dispensary licenses for adult use to social justice applicants. Still, cannabis equality advocates and business owners warned recently that Illinois’ social justice program is “on the verge of collapse” due to the state’s arduous rules and regulations.
A drop in sales
Florida cannabis sales fell to $146.2 million in Augustt, from $148.2 million in the previous month as the market continues to see pricing pressure and more discounts.
Arizona marijuana sales fell in the third quarter of 2022 a downward trend can also be observed in wholesale prices. Zuanic added that the market “has reached ‘maturity’ much earlier than expected” as it launched in January 2021.
