Big cannabis firms have opposing views of reform under Trump 👀

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Big cannabis firms have opposing views on reform under Trump

Driving the news: It’s earnings season for some of the biggest cannabis firms. Yesterday, we reported on Green Thumb Industries’ stellar results and CEO Ben Kovler’s outlook on federal reform under Trump 47.

Today, we’ve got two more big US cannabis firms (multistate operators or MSOs), Trulieve and Verano, as well as Canadian firm Cronos Group.

The big takeaway: We’ll get into the numbers in further detail below. But I want to point out here how opposed Trulieve CEO Kim River’s view on the Trump Administration is from GTI’s.

In yesterday’s earnings call, Rivers said: “We remain optimistic that the Trump administration will work to address inequities for state legal operators, including access to banking, expanded research, and normalized tax rates.”

Note, that doesn’t say she’s optimistic about legalization. Trump and Congressional Republicans, in her view, understand the regulatory issues cannabis companies face and will pursue industry-friendly reform.

Contrast that to Kovler’s comments on Wednesday: “We’ve seen things differently from our peers for a long time.... And we are not optimistic about changes in DC. Look at the appointees and look at Kennedy’s (RFK JR’s) total 180. So instead, we’re going to play offense… We think the people in DC are out to lunch.” 

“We think the DEA is corrupt and misguided and out to lunch. So it's not a popular opinion.” 

Verano CEO George Archos is somewhere in the middle: “Given President Trump’s campaign promises, we are cautiously optimistic he will support rescheduling and banking reforms that align with this administration’s pro-business, state’s right agenda, which would finally allow America’s next great homegrown industry to reach its full potential.” 

“However, we never run the business based on legislative assumptions and remain confident in our ability to grow the company in the current environment,” he said.

Okay, so what: Most of the industry prognostication over whether the White House and Congress will push cannabis reform is a matter of speculation based on a few of Trump’s social media posts.

Obviously, Trump says and posts a lot of crazy things, and there’s little in the way of hard evidence or action from his Administration on cannabis policy so far. There’s plenty of time for that to change, but this clearly isn’t a day one initiative.

Trulieve is based in Florida, and Rivers has aligned with the state’s Republican Party in the past, outside of Gov. Ron DeSantis’ opposition to failed bid to legalize cannabis last year. Green Thumb Industries is based in Chicago, and Kovler is connected to Gov. JB Pritzker.

Both CEOS are educated and smart. But you see where I’m going: The answer to whether Trump and the Republican majority will be good or bad for federal cannabis reform is, it seems, a function of whether the person answering the question is a Republican or a Democrat. 

I don’t know how either CEO voted in November. I’m projecting a bit. But they ostensibly have access to the same sources of information from the media, trade groups, and lobbyists, and arrived at opposite conclusions. 

The final word: Trump is seeking to remake the US federal government in his image. I’m not sure where cannabis reform fits into that equation, yet.

Until change comes, business leaders should focus on controlling what they can control by innovating and offering products consumers love, cutting costs, and operating as lean as possible to improve margins. 

The federal government doesn’t seem to coming to rescue the industry. But if or when it does, cannabis companies should try to be in the best possible position.

-JB

“In Q3 2024 we talked about how assuming a “reversion to the mean” for MSO profits was like assuming that a journeyman shooting guard would start to revert to Steph Curry’s three point accuracy,” writes Jerry Derevyanny in his yearly letter to Bengal Capital Investors.

It’s worth reading the letter in full for a contrarian take on MSOs and the cannabis industry. Read it here.

Let’s get to the numbers: 

Trulieve reported its full-year and fourth-quarter results on Thursday: For the last fiscal year, the company reported a $155 million net loss on $1.2 billion of revenue, up 5% from last year. The company generated $150 million of free cash flow. 

For the last quarter, Trulieve reported a $60 million net loss on $301 million of revenue. Check out the full results here. 

The stock closed up nearly 6% on Thursday.

Verano reported its full-year and fourth-quarter results on Thursday: For the last fiscal year, the company reported a $342 million net loss on $879 million of revenue, a 6% decrease. 

For the last quarter, Verano reported a net loss of $273 million on $218 million of revenue, an 8% decrease. The company reported a gross profit of $108 million. Full results here.

The stock closed up 3% on Thursday.

Cronos Group reported its full-year and fourth-quarter results on Thursday: The company reported $40 million net income on $118 million of revenue for the year ending on December 31. The year prior, the company lost $70 million. Full results here.

The stock closed up over 8% on Thursday. 

Up next: Curaleaf reports on Monday at 5 PM Eastern.

-JB

New Jersey lawmakers seek to recriminalize illicit cannabis possession 🚨

New Jersey Senate President Nick Scutari, the original architect of the state’s legalization law, is pushing a bipartisan bill that would recriminalize cannabis possession if it is obtained from an illicit source. Read more.

New Jersey Gov. Phil Murphy wants to raise cannabis taxes 🗽

Gov. Phil Murphy wants to hike a special tax on cannabis from $2.50 to $15 an ounce to fund social service and violence intervention programs with tens of millions of dollars in new revenue, the New Jersey Monitor reports.

Massachusetts releases in-depth report on state’s cannabis industry 🥊

Massachusetts’ cannabis industry has has pulled in over $8.4 billion in total sales across both medical and recreational markets since legalization, per a new report from regulators. But while many dispensaries are thriving, ownership and leadership remain mostly white and male, though diversity is slowly increasing. The state has about 7000 licensed operators. Download it here.

German cannabis imports double 🇩🇪

Germany’s medical cannabis imports surged in 2024, nearly doubling to 31.6 metric tons in the fourth quarter of last year, as new regulations expanded access. However, there is political pushback to the industry: New German Chancellor Friedrich Merz wants to repeal legalization entirely, as we’ve written. 

New York Medical Cannabis Industry Association testifies on states medical program 🩺

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1906 launches THC infused drink packs 🍹

New York cannabis brand 1906 launched Off Duty, a portable, flavorless, THC-infused cannabis shot that can be added to any drink. CEO Peter Barsoom says he sees the new product as meeting a “big, big consumer demand,” for THC beverages with less sugar — and instead of pre-packaged seltzers, consumers can make their own favorite cocktails. 

High Times sells off intellectual property 📕

High Times, once an iconic magazine that has been stripped for parts, is selling off its intellectual property including the magazine itself and Cannabis Cup events, MJBizDaily reports.

And more:

Curaleaf expands its hemp-derived THC beverages into over 100 Total Wine stores.

Unlicensed New York cannabis shops are bad for kids 🛑

Unlicensed cannabis shops in New York City outnumber legal retailers and frequently allow kids to purchase highly potent products, according to new research from Columbia University and published in the journal Pediatrics. The researchers used secret shoppers to see what products were available, whether the advertising was child-friendly, and if they were carded at the door. Read more. 

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