Cannabis Industry Ready for Minimum-Wage Hike

Cannabis Salaries & Minimum Wage
Cannabis Salaries & Minimum Wage

As more and more states increase the minimum wage that businesses must pay to their employees, some have wondered whether this might affect the financial bottom line of the cannabis industry. However, industry experts do not believe that a minimum wage hike will have much impact on growers, cultivators, dispensaries, or the industry as a whole because most cannabis companies already pay their workers more than the proposed minimum wage. Keep reading this blog to learn more.

Cannabis Companies Pay More Than Minimum Wage in Most States

According to the 2020 Cannabis Industry Salary Guide, budtenders who work at dispensaries in states where cannabis is legal are paid, on average, $15 an hour. This is significantly more than the minimum wage in many of these states. Additionally, a lot of cannabis companies attract workers with generous benefit packages that put the workers’ annual pay well above the minimum wage. A recent survey of cannabis businesses found that roughly 90% offer benefits such as health insurance, paid leave, or a 401(k) plan to full-time employees who work at least 40 hours per week.

Some major nationwide retailers, like Target and Walmart, have announced that they will be moving toward a $15 minimum wage for all employees. However, many small businesses have not yet made that move – and it is here where cannabis companies are extremely competitive and, in many cases, are more likely to attract highly qualified job applicants.

So, why does the cannabis industry tend to offer higher salaries and greater benefits to employees? The specialized knowledge required to work in the industry and to serve knowledgeable customers often makes it difficult to find qualified workers. Moreover, cannabis businesses recognize the importance of retaining employees who are able to effectively do the job because continuity is critical to business growth.

Cannabis Businesses Thrive During COVID-19 Pandemic

While there were a number of thriving industries that paid good wages before the COVID-19 pandemic, the economic downturn caused by the pandemic forced many industries to scale back their operations and cut costs by either reducing their workforces or slashing salaries and benefits for employees. This was especially true of smaller businesses that needed to close their doors due to state lockdown orders. However, the cannabis industry actually managed to surge during the coronavirus pandemic because states declared dispensaries “essential businesses” that could remain open. The end result was that a lot of cannabis companies were able to maintain their workforces and, in some cases, even expand their workforces with increased pay rates and benefits.

Cannabis Operators Likely to Be Unaffected by Federal Minimum Wage Hike

While there has been talk in recent weeks and months of the U.S. Congress passing a $15 federal minimum wage, it appears increasingly unlikely that this will happen anytime soon. Despite the lack of a higher federal minimum wage, however, many states have been increasing their own minimum wage requirements for businesses. The highest minimum wage imposed by any state is California’s $14 an hour requirement, which applies to all businesses in the state that have more than 25 employees.

For cannabis operators with retail stores and cultivation facilities in states where cannabis is legal, the rise in minimum wage in many of these states has not made much of a difference to the businesses’ bottom lines. That’s because the majority of these cannabis operators are already paying their workers above the state-imposed minimum wage. Looking forward, any additional increases to state minimum wage requirements are also unlikely to affect cannabis companies in these states because most successful cannabis operators already factor in a higher cost of doing business – whether it’s higher salaries for workers or a “cannabis premium” imposed on real estate purchases.

Contact Scythian Cannabis Real Estate Today

Scythian Cannabis Real Estate is a privately held cannabis real estate fund based out of Denver, Colorado. Scythian has a current portfolio of cannabis properties used as retail dispensaries in Colorado, North Dakota, and Pennsylvania, as well as a pipeline of future acquisitions in states like Michigan, New Jersey, Massachusetts, and throughout the United States. If you are a cannabis operator looking to raise capital, or an individual looking to invest in the growing cannabis market, Scythian Real Estate can assist you. Contact us for more information.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Curaleaf Ends 2020 with Record Quarter

Curaleaf Q4 2020 Cannabis Revenues
Curaleaf Q4 2020 Cannabis Revenues

Major cannabis company Curaleaf recently reported record earnings to close out 2020. According to financial and operating results for the fourth quarter of 2020, Curaleaf generated all-time high revenues for both an entire year and a single quarter. What could the recent success of Curaleaf mean for the company going forward? And what could it mean for the cannabis industry and major cannabis operators more generally? Keep reading this blog to learn more.

Curaleaf Revenues Hit Record Highs in 2020

Curaleaf Holdings, Inc. is a leading provider of consumer cannabis products in the United States. Curaleaf operates more than 100 dispensaries in 23 states, and the company also has numerous cultivation and processing sites, as well as nearly 4,000 employees and team members. Additionally, Curaleaf is a vertically integrated cannabis provider with its own in-house brands, including the popular Curaleaf and Select brands.

In 2020, Curaleaf revenues hit record highs. Moreover, the final three months of 2020 continued an upward trend that suggests 2021 could be even more profitable for the cannabis company. According to fiscal and operating results that were recently made public, Curaleaf’s Q4 2020 saw the company’s total revenues exceed $230 million. This represented a sizable 23% increase over Curaleaf’s Q3 earnings of $182 million, and a massive 205% increase over the company’s Q4 2019 earnings. These financial figures for the final three (3) months of 2020 built on the already-strong results of the preceding nine (9) months. For the entire fiscal year 2020, Curaleaf had total revenues of more than $626 million. This represented a 184% increase over company revenues for 2019.

Curaleaf Cannabis Sales Fueled by Retail Operations

A significant portion of Curaleaf revenues and profits can be attributed to the company’s cannabis sales. For 2020, Curaleaf recorded a gross profit of approximately $275 million on sales of cannabis products at dispensaries in states where marijuana can be legally sold for either recreational use or medical use. In fact, Curaleaf launched a total of 84 new cannabis products last year, with 32 of those products debuting during the last three (3) months. Curaleaf’s new product lines were the culmination of heavy investment in research and development, and many of the finalized products were sold at dispensaries acquired by Curaleaf. During 2020, Curaleaf completed acquisitions of eight (8) smaller cannabis businesses and product lines, including Grassroots Cannabis, Alternative Therapies Group (ATG), Arrow Companies, Cura Partners (Select), Curaleaf NJ, Prime Organic Therapy (MEOT), Remedy Compassion Center, and Virginia’s Kitchen (Blue Kudu). The acquisition of Grassroots Cannabis, in particular, allowed Curaleaf to expand its presence into six (6) new states, including Illinois and Pennsylvania.

As evidenced by the acquisition of ATG in Q4, the expansion of Curaleaf’s retail and wholesale operations across the United States showed no sign of abating as 2020 came to a close. In fact, Curaleaf saw its total number of retail operations expand from 51 to 96 over the course of the last year, and its retail footprint also expanded from 14 states to 23 states. The company’s retail growth was matched by its expansion in cannabis cultivation and processing: Curaleaf added nine (9) cultivation sites and 15 processing sites last year. While much of the company’s growth was a result of corporate acquisitions and mergers with other cannabis companies, Curaleaf also had organic growth that allowed for entry into new and emerging cannabis markets.

Looking Ahead to 2021: Continued Growth as Curaleaf Expands into New Cannabis Markets

So far in 2021, Curaleaf has already completed a number of significant acquisitions and deals. For instance, Curaleaf recently opened new retail stores in Florida, Maine, and Pennsylvania. Although Curaleaf already had a robust presence in all three states, the additional dispensaries should bode well for the company as it looks to continue expanding operations. Additionally, the recent store openings give Curaleaf a total of 101 retail locations that sell either adult-use or medical cannabis.

Like other cannabis companies, Curaleaf is expected to thrive as more and more states legalize cannabis for adult use. Joe Bayern, Curaleaf’s Chief Executive Officer (CEO), anticipated further growth for the company in 2021 as Arizona and New Jersey finish implementing their own rules for new adult-use cannabis markets. Both states officially legalized cannabis for recreational use in November 2020 when voters overwhelmingly supported ballot measures. According to Bayern, the legalization of marijuana in New Jersey may “accelerate the potential of future adult-use in key states such as New York, Pennsylvania, and Connecticut.” Since Curaleaf already has a strong presence in those states, the success of legalization efforts at the state level could be very good for Curaleaf’s financial bottom line in the years ahead.

Curaleaf Expected to Enter European Cannabis Market

Perhaps the biggest development for Curaleaf so far this year is its possible entry into the burgeoning European cannabis market. Curaleaf is nearing the finish line of discussions to acquire EMMAC Life Sciences Limited, the largest vertically integrated independent cannabis company in Europe. If the deal is finalized, Curaleaf would become the global leader for retail cannabis sales, and gain access to medical cannabis markets in Germany, Italy, Portugal, Spain, and the United Kingdom. Boris Jordan, Curaleaf’s Executive Chairman, called the Curaleaf-EMMAC deal a “milestone transaction” that will give Curaleaf access to a market with nearly 750 million people.

A Curaleaf press release noted that the acquisition would cost roughly $286 million and could close during Q2 2021. Once complete, the deal would provide Curaleaf with strong international cannabis revenues for the foreseeable future.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that has relationships with several of the top cannabis operators in the country. One of the companies that Scythian works with is Grassroots Cannabis, which was recently acquired by Curaleaf. If you are a cannabis operator looking to add capital, Scythian Real Estate may be able to help you. For more information, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Columbia Care Posts Record Q4 for Cannabis Sales

Columbia Care Q4 2020 Cannabis Revenues
Columbia Care Q4 2020 Cannabis Revenues

Cannabis company Columbia Care recently announced its financial results for the fourth quarter of 2020, and the results exceeded expectations. Preliminary data showed that the company set a record high for performance in both a single quarter and in a full year. What does Columbia Care’s continued success mean for the cannabis industry more generally? Keep reading this blog to learn more.

Columbia Care Remains Industry Leader for Medical and Adult-Use Marijuana

Columbia Care Inc. is one of the nation’s biggest cultivators, manufacturers, and providers of legal cannabis, with operations in 18 states. Columbia Care, which is based in New York, was one of the first companies to provide medical cannabis in the United States. Today, Columbia Care has expanded its business to also include adult-use cannabis, but it remains an industry leader in medical cannabis operations across the U.S., including 81 dispensaries and 27 cultivation and manufacturing facilities.

In Q4 for the year ending December 31, 2020, Columbia Care established an all-time company record for cannabis sales revenues. Financial data shows that Columbia Care generated around $87 million in combined revenues in the fourth quarter, which is up more than 50% over the previous quarter and more than 230% over the fourth quarter of 2019. These figures place Columbia Care among the most successful cannabis operators in the entire country, as well as making it “the fastest growing top-tier multi-state operator.”

Nicholas Vita, the CEO of Columbia Care, said in a company press release that the record sales figures were “driven by continued revenue growth and margin expansion.” Vita specifically highlighted the company’s effective navigation of challenges brought on by the COVID-19 pandemic, which caused significant problems for many businesses in other industries. For the entire fiscal year of 2020, Columbia Care generated approximately $290 million in pro forma revenue.

Columbia Care Completes Acquisition of The Green Solution in Colorado

At the close of 2020, Columbia Care completed major acquisitions of both The Green Solution (TGS) and Project Cannabis. Columbia Care also announced its upcoming acquisition of Green Leaf Medical. The integration of TGS dispensaries into the Columbia Care portfolio is expected to make Columbia Care a leader in Colorado, the world’s largest legal cannabis market. The Green Solution has a longstanding relationship with Scythian Real Estate, a Denver-based cannabis real estate fund with more than a dozen cannabis properties that operate as TGS dispensaries. The TGS dispensaries are located across Colorado, including Denver, Fort Collins, and Black Hawk.

In the third quarter of 2021, Columbia Care’s acquisition of Green Leaf Medical is expected to be finalized. Columbia Care has already agreed to purchase Green Leaf Medical LLC for $240 million in combined cash and stock. The deal should give Columbia Care an even stronger operational footprint on the East Coast, with both cultivation facilities and retail stores in Maryland, Ohio, and Pennsylvania.

These acquisitions continue a trend of Columbia Care integrating other cannabis companies into its nationwide business model and expanding its reach into new cannabis markets. Importantly, the promising cannabis sales figures for Columbia Care do not take into account the company’s upcoming entry into the New Jersey cannabis market. New Jersey recently legalized cannabis for recreational use, with the state expected to become the largest cannabis market in the eastern U.S. and to generate $1 billion annually in the coming years. It is also possible that Columbia Care could expand into other cannabis markets if certain states, like New York and Virginia, decide to legalize cannabis for recreational use.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides major U.S. cannabis operators with financing and other operational assistance. For more information, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

2020 in Review: Cannabis Industry Thrives During COVID

Cannabis Industry Sales Surge
Cannabis Industry Sales Surge

The cannabis industry thrived in 2020, even as plenty of other industries struggled due to the coronavirus pandemic. One major reason for the success of cannabis businesses last year was the relaxation of state and local laws that otherwise would have limited the ability of dispensaries to stay open and operate during COVID-19.

To learn more about other important changes to the cannabis legal landscape in 2020, read the other entries in Scythian’s “2020 in Review” blog series: Part 1 on states voting to legalize cannabis and Part 3 on Congress voting to decriminalize cannabis.

Cannabis Industry Sees a COVID Bump: Dispensaries Have Record Sales in 2020

While many other industries have suffered financially as a result of the COVID-19 pandemic, the cannabis industry has actually seen a massive uptick in business. Some have referred to this as “the cannabis COVID bump.” So, what explains the cannabis industry’s COVID bump?

Countless retail stores, restaurants, and other brick-and-mortar businesses throughout the United States were forced to temporarily close their doors when state-ordered lockdowns went into effect at the beginning of the coronavirus outbreak. For many of these businesses, the temporary shutdowns ended up being permanent: the loss of revenues for weeks and even months meant that the stores were unable to reopen their doors even after the lockdowns were lifted.

By contrast, the cannabis industry saw a surge in revenues as dispensaries managed to remain open during the COVID-19 pandemic. That is because retail dispensaries were deemed “essential businesses.” The “essential” designation given to these legal marijuana providers meant that they could continue operating and selling adult-use cannabis to consumers. For states where medical marijuana is legal, one strategy employed to keep the businesses open during COVID was to classify dispensaries as pharmacies.

Since the start of the pandemic, cannabis businesses have seen a huge boost in sales. States like Colorado, Oregon, and Illinois have reported record-breaking month after record-breaking month for state-licensed dispensaries. In Colorado, state cannabis sales surpassed the entire total for 2019 by October 2020. One likely reason for the surge in cannabis sales during COVID is the fact that, for the most part, dispensaries have been able to remain fully operational and open to the public.

Cannabis Industry Adapts with Marijuana Deliveries

The cannabis industry also adapted during the coronavirus pandemic: door-to-door cannabis deliveries became common in states that allow them. Certain states, such as Illinois, Michigan, and New York, relaxed their previously strict rules that limited delivery options for cannabis businesses and customers. The thinking behind these regulatory changes was that by allowing cannabis deliveries, the state could ensure that customers would not have to venture outside and potentially risk spreading the coronavirus.

The same logic was used to justify a related change to state rules in Illinois, Michigan, and New York that govern the amount of marijuana that a customer can purchase at one time: by decreasing the total number of times that customers and dispensary employees need to interact with one another, the risk of spreading coronavirus was also decreased.

Cannabis Industry Gains Legitimacy with “Essential Business” Classification

Beyond the direct advantage of dispensaries being allowed to remain open and operational during COVID, the classification of dispensaries as “essential” also had an indirect advantage of further legitimizing the cannabis industry. For many in the industry, this classification could be seen by the public as symbolic and might help to embolden those who are seeking to legalize cannabis in more states and, potentially, at the federal level.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and operational assistance to some of the country’s most sophisticated cannabis operators. For more information, email us today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Marijuana Flower Prices on Rise in Colorado

Premium Marijuana Flower
Premium Marijuana Flower

The prices of premium marijuana flower in Colorado continue to climb higher and higher during the COVID-19 pandemic. What could steadily rising prices for high-quality marijuana flower mean for the cannabis industry in Colorado in 2021 and beyond? Keep reading this blog to find out.

Wholesale Prices of Marijuana Flower in Colorado Set Records

Wholesale prices for marijuana flower in Colorado are currently at their highest point in nearly five (5) years. The Colorado Department of Revenue, which maintains records on legal cannabis sales in the state, recently reported that the Colorado wholesale market price for one pound of marijuana flower has reached $1,721. According to government agency records, the last time the price eclipsed $1,700 was in July 2016. Moreover, this represents a major reversal of fortune for the marijuana flower market: just two years ago, wholesale flower prices barely hit $700 per pound.

The price of marijuana flower on the wholesale market steadily increased since the beginning of 2020 – and then saw a massive spike in the last quarter of 2020. According to data provided by state-licensed cannabis operators, wholesale flower prices in Colorado went up by more than 30% between October 2020 and January 2021.

The higher prices for marijuana flower are likely an important factor in the continued explosion of cannabis sales in Colorado. Colorado cannabis operators seemed to set a new record for dispensary sales every month in 2020. For the entire year, total sales of recreational marijuana and medical marijuana in Colorado totaled more than $2 billion.

Strong Demand for Expensive Cannabis Flower Brands Amid COVID-19 Pandemic

Marijuana retail businesses have also noticed that there is a particularly strong demand by consumers for some of the more expensive cannabis flower sold by top-tier cannabis brands. Marijuana flower sold by premium brands are in high demand right now because the demand for cannabis generally has increased during the coronavirus pandemic.

At the beginning of the COVID-19 pandemic, cannabis consumers tended to stockpile cheaper cannabis flower products because they were worried about possible lockdowns and the closing of dispensaries. (Dispensaries in Colorado and elsewhere were actually able to remain open during the pandemic because states classified the dispensaries as “essential businesses.”) What ended up happening, however, is that cannabis consumers gravitated toward the more expensive, artisanal cannabis that remained on shelves after budget flower products were gone. This led to consumers appreciating the more potent marijuana products, including premium flower brands.

Consumers Paying More for Popular Marijuana Flower Brands

While greater demand and higher prices for marijuana flower is certainly good news for marijuana cultivators, some cannabis manufacturers and retailers have been forced to adjust their sales prices to account for increased costs. Ultimately, those additional costs are passed on to cannabis consumers who don’t seem to mind as the cannabis industry targets a new, more refined demographic. These days, individuals who head to their local dispensary to purchase cannabis flower tend to seek out high-quality, small-batch flower produced by premium brands like Cookies, Kaviar, and Snaxland.

Greater consumer demand for more expensive cannabis flower has prompted cannabis businesses to set higher prices. While the average wholesale price for cannabis flower in Colorado is around $1,700 per pound, some brands price their high-grade flower product at more than $4,000 per pound. The expectation among many in the cannabis industry is that demand for premium marijuana flower will not subside even after the COVID-19 pandemic is over.

New Business Strategies for Colorado Cannabis Operators During Coronavirus

Some cannabis businesses operating in Colorado are employing new strategies to try to take advantage of the increased demand for premium marijuana flower. For example, dispensaries are collaborating with branded flower companies on new product launches to put a spotlight on higher-end marijuana flower products. Additionally, premium flower brands are taking advantage of high numbers of followers on social media platforms like Twitter, Facebook, and Instagram to create buzz around new products. Beyond that, the limited supply of certain small-batch flower makes them even more desirable to consumers who don’t want to miss out.

One premium flower cultivator in Colorado that has seen a surge in sales during the pandemic is Kaya Cannabis, a cannabis company that utilizes in-house experts to cultivate unique strains of marijuana flower and other products in small batches. The Colorado-based craft growing cannabis company currently operates dispensaries located on South Fox Street in Denver, West Colfax in Denver, and West Jewell Avenue in Lakewood. All three marijuana retail stores provide customers with a wide variety of cannabis products, including premium flower brands like Kaviar and the Kaya Cannabis in-house brand. The Kaya Cannabis Santa Fe Dispensary on South Fox Street is also used as a cannabis cultivation facility.

Colorado’s Local Marijuana Market Thriving as Cannabis Industry Gains Legitimacy

Colorado’s tourism industry is struggling during the coronavirus pandemic as most people choose not to travel across state lines and risk their health. This means that the booming cannabis economy in Colorado is driven almost entirely by local residents in towns like Denver, Aurora, and Fort Collins. What residents have realized during COVID-19 is that their disposable income may be better spent on cannabis than on trips to restaurants, concerts, or movie theaters – especially if the plan for the foreseeable future is to remain indoors and at home.

The Colorado cannabis market has also thrived as marijuana becomes more accepted and is seen as a “legitimate” industry. In the recent 2020 election, voters in five states approved ballot measures to legalize marijuana for either recreational use or medical use. With several more states appearing primed to legalize adult-use cannabis in the next few years, it seems likely that cannabis will gain even more legitimacy.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that partners with sophisticated cannabis operators in Colorado and throughout the U.S. Scythian recently partnered with Kaya Cannabis on a sale-leaseback deal for the cannabis operator’s 1075 South Fox Street dispensary in Denver, CO. If you are a cannabis operator looking to unlock real estate equity and propel company growth, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Cannabis Company Columbia Care Has Record Quarter

Columbia Care Cannabis Revenues
Columbia Care Cannabis Revenues

The cannabis business continues to be very good for Columbia Care. The company behind many of the cannabis industry’s leading dispensaries recently reported its financial and operating results for the third quarter – and the numbers are staggering. Columbia Care posted all-time highs for a single quarter in terms of revenues and profits generated from the cultivation, manufacturing, and sale of medical cannabis and adult-use cannabis. What does this mean for Columbia Care and the rest of the cannabis industry going forward? Continue reading this blog to learn more.

Columbia Care’s Cannabis Revenues Are on the Rise

Columbia Care began as a leading provider of medical cannabis in the United States, and the company is now one of the country’s largest cannabis cultivators, manufacturers, and retail providers of both medical cannabis and recreational cannabis. Columbia Care currently operates 100 different facilities, including 76 dispensaries in numerous cannabis markets.

“Our growth strategy and operational discipline resulted in Columbia Care generating another quarter of record results.”

-Nicholas Vita, Columbia Care CEO

Columbia Care generated combined revenues of nearly $180 million during Q3 2020. This resulted in a gross profit of nearly $70 million and an adjusted EBITDA of $2.4 million. These third quarter results for Columbia Care included just one month of revenues from The Green Solution (TGS), which was officially acquired on September 1. During the month that followed, TGS generated more than $9 million in revenues and more than $4 million in gross profit.

Columbia Care Acquires The Green Solution in Colorado

In addition to the strong financial results, another reason for optimism regarding Columbia’s Care continued growth is the recent acquisition of The Green Solution (TGS). Nicholas Vita, the CEO of Columbia Care, noted that the acquisition of TGS will help to solidify the parent company’s leadership position in the Colorado cannabis market. Vita added that the TGS acquisition strengthens Columbia Care’s national portfolio of cannabis brands and will provide experience and expertise as the company looks to expand into new state markets where adult-use and/or medical cannabis is either already legal or on the cusp of becoming legal.

Columbia Care Dispensaries Are Located in Top Cannabis Markets

Columbia Care has dispensaries all over the United States. Some of the key cannabis markets where Columbia Care operates dispensaries include:

  • Colorado: Columbia Care revenues and gross profit in Colorado were both up 19% in Q3 when compared to Q2. These positive trends were due in large part to the acquisition of The Green Solution, the largest vertically integrated cannabis operator in the state. Columbia Care also operates a low-cost cannabis cultivation facility in Trinidad, CO.
  • Illinois: Columbia Care operates a Canopy in Aurora cultivation facility and saw record revenues for cannabis flower production and cannabis flower wholesale revenues in Illinois during Q3. Columbia Care also opened an adult-use dispensary in Villa Park in September.
  • New York: Columbia Care revenues in NY went up almost 25% from Q2 to Q3. This increase in cannabis revenues was fueled by the introduction of more efficient marijuana cultivation and manufacturing formats.
  • Pennsylvania: Columbia Care’s Q3 revenues in Pennsylvania were up roughly 20% when compared to Q2 revenues. The surge in demand is expected to continue, prompting Columbia Care to continue pursuing expansion throughout the state.

What Does the Future Hold for Columbia Care and the U.S. Cannabis Market?

The future looks bright for Columbia Care and the United States cannabis industry in general. Columbia Care’s Q3 2020 financials showed significant growth, with a 78% increase in company profits when compared to the second quarter of 2020 and a 300% increase in profits over the third quarter of 2019. These trends are expected to continue in Q4 and into 2021.

Columbia Care expects to increase its position in California over the next year as a result of the company’s recent acquisition of Project Cannabis. Columbia Care is also expected to expand its already-strong portfolio of cannabis products with Seed & Strain, the company’s first cannabis lifestyle brand developed entirely in-house.

Contact Scythian Today for Information on Cannabis Real Estate in Colorado and Across the U.S.

Columbia Care’s acquisition of The Green Solution (TGS) was also good news for Scythian Real Estate. Scythian is a privately held fund that owns more than a dozen cannabis properties leased by TGS and operated as dispensaries. These dispensaries are located throughout Colorado, including Denver, Aurora, Fort Collins, and Black Hawk. The Green Solution is just one of the major U.S. cannabis operators that Scythian has partnered with.

To learn more about the Scythian Real Estate Fund, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Curaleaf Has Record Cannabis Earnings in Q3 2020

Curaleaf Record Earnings
Curaleaf Record Earnings

Third quarter revenues for major cannabis operator Curaleaf totaled $182.4 million, representing a new all-time record for earnings by the company in a single quarter. Additionally, the future for Curaleaf looks even brighter after the cannabis company completed its acquisition of competitor Grassroots Cannabis.

Curaleaf Revenues on the Rise in 2020

Curaleaf has seen its revenues and profits trending upward in 2020. Curaleaf’s Q3 revenues, which officially ended on September 30, increased by approximately 55% over the cannabis company’s Q2 revenues, and increased by a remarkable figure of 195% year over year when compared to Q2 in 2019. Those numbers come directly from Curaleaf’s financial and operating results, which were recently released by the company.

Curaleaf’s pro forma revenue in the third quarter of 2020 was $215.3 million. This was a record high for the cannabis operator. “Pro forma revenue” refers to the company’s managed revenue plus revenue from businesses that Curaleaf acquired. Curaleaf’s pro forma revenue for the third quarter includes revenue from the company’s recent acquisitions of Arrow Alternative Care and Grassroots Cannabis, which were both completed during Q2.

Curaleaf’s managed revenue in the third quarter was $193.2 million. “Managed revenue” is defined as total company revenue, as well as revenues from businesses that Curaleaf manages. The company saw a strong increase in managed revenue of 59% over the second quarter in 2020 and 164% over the third quarter in 2019. Mike Carlotti, Curaleaf’s Chief Financial Officer, said that the company anticipates “a continued rise in managed revenue” in the fourth quarter and in 2021 as Curaleaf completes its acquisition of Alternative Therapies Group in Massachusetts.

Curaleaf’s adjusted EBITDA in the third quarter was also a record high for the company: $42.3 million. Adjusted EBITDA includes earnings before interest, taxes, depreciation, and amortization. According to Curaleaf financial data, adjusted EBITDA in Q3 2020 was up 51% over Q2 2020, and a whopping 305% year-over-year increase when compared to Q3 2019.

Cannabis Sales and Profits Increase as Curaleaf Expands into New Markets

Gross profits for Curaleaf from retail cannabis sales in Q3 2020 were almost $90 million. This was a 110% increase over Q2 2020, and a massive 280% increase over gross profits from cannabis sales in Q3 2019. The surge in retail revenue was driven largely by the company’s continued growth and expansion, which included multiple new dispensary openings in Florida. Curaleaf also launched the Select brand in Illinois, Ohio, and Pennsylvania.

The strong sales revenues for Curaleaf came as the cannabis business scaled and operated dispensaries across 17 states. Moreover, Curaleaf continues to scale with an eye toward future growth, as the company recently expanded its marijuana retail sales presence to 23 states thanks to the acquisition of Grassroots Cannabis.

In addition to acquiring several major cannabis brands and companies, Curaleaf also continued to improve the operating capacity and efficiency of its own existing cannabis cultivation and processing facilities.

Curaleaf Thrives Despite Coronavirus Impact on Cannabis Market

The surge in profits for Curaleaf came even as the company was affected by the coronavirus pandemic, much like other businesses that depend on retail sales. Curaleaf sustained an estimated adverse impact of $25.6 million due to temporary store closures caused by the COVID-19 pandemic, as well as restrictions placed on retail businesses in states like Massachusetts and Nevada where Curaleaf has a significant presence.

Some of the third quarter highlights for Curaleaf included:

  • Launched the Select brand in three (3) new states. Select is a popular cannabis concentrate brand with a dominant footprint in numerous state and regional markets.
  • Completed merger with Grassroots Cannabis. This acquisition has the immediate effect of making Curaleaf the largest cannabis company in the world in terms of both revenue and operating presence. The merger with Grassroots also allowed Curaleaf to expand their presence into six (6) new states, including flourishing cannabis markets in Illinois and Pennsylvania.
  • Completed acquisition of Maine Organic Therapy assets. Curaleaf was already managing these assets, but now the merger of the two companies has been finalized and Maine Organic Therapy has been officially integrated into Curaleaf. Curaleaf has converted and consolidated nearly all of the company’s managed entities, and Curaleaf expects to consolidate the rest of its managed entities in the fourth quarter of 2020.

Curaleaf Sale-Leaseback Deals Provide Additional Cash Flow

According to a press release issued by Curaleaf, the company generated significant cash flow from operations in the third quarter of 2020. Curaleaf reportedly has access to around $85 million in cash.

Curaleaf has continued to complete sale-leaseback deals. These types of transactions allow cannabis operators like Curaleaf to immediately improve their cash flow. For example, Curaleaf was able to raise around $41 million in net proceeds from sale-leaseback transactions in the third quarter of 2020.

The Future Looks Bright for Curaleaf

Curaleaf is the largest vertically integrated multi-state cannabis operator in the United States, with cannabis cultivation sites, cannabis processing facilities, recreational marijuana dispensaries, and medical marijuana dispensaries fully operational in 23 states. Curaleaf is a cannabis industry leader with a strong reputation for providing high-quality products and offering manufacturing and cultivation expertise. Additionally, Curaleaf’s top-selling cannabis products include both the main Curaleaf brand and the Select brand.

Curaleaf CEO Joseph Lusardi is extremely optimistic about the company’s future prospects. According to Lusardi, “Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania, and Connecticut.” Lusardi pointed to several different types of transactions that Curaleaf expects to complete in the months ahead, including organic initiatives and integration of the Select brand into Curaleaf products.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a full-service real estate partner of large cannabis operators who need access to capital. Scythian has partnered with Curaleaf, through Grassroots Cannabis, to provide access to capital via the Scythian real estate investment fund.

For more information about how you can partner with Scythian, send an email today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

All-Time High for Cannabis Sales in Oregon

Oregon Cannabis Sales Rise
Oregon Cannabis Sales Rise

Oregon cannabis dispensaries set a new single-month record in May with approximately $103 million in sales of marijuana. This was the first time ever that the state has topped $100 million in monthly cannabis sales. What could the boom in retail marijuana sales mean for cannabis operators in Oregon? And could it provide savvy investors with new opportunities to get involved in the Oregon cannabis market? Read on to learn more.

Oregon Cannabis Sales Top $100 Million in Single Month

According to data from the Oregon Liquor Control Commission, retail marijuana stores in Oregon reported total sales of more than $103 million in May 2020. (May is the most recent month for which sales records have been made available to the public.) While this was the third straight month that Oregon set a new record for cannabis sales, it was the first time that retail cannabis sales have exceeded $100 million in a single month.

When compared to retail marijuana sales in 2019, the success of Oregon dispensaries so far in 2020 is staggering. The total of $103 million generated by Oregon dispensary sales of recreational cannabis and medical cannabis in May 2020 represents an increase of roughly 60% over total cannabis sales in May 2019. Moreover, these gains are not mere anomalies: year-over-year sales of marijuana in Oregon increased by 37% in March and 44% in April. Through the first five (5) months of 2020, Oregon retail pot shops have sold more than $415 million worth of product – a 40% increase when compared to the first five (5) months of the previous year.

Oregon Dispensaries Adjust to Changing Conditions Caused by Coronavirus Pandemic

Oregon dispensaries have seen a surge in retail cannabis sales even as most other retail businesses in the state struggled to adjust to coronavirus-related restrictions. In fact, the cannabis industry has thrived during the COVID-19 pandemic, in part because states like Oregon declared that cannabis dispensaries are “essential businesses” that should be exempt from shutdown orders.

Oregon dispensaries were allowed to remain open during the coronavirus pandemic with certain restrictions in place, such as social distancing and limits on the number of people allowed inside stores at once. Oregon retail marijuana shops were also able to take advantage of state laws that allow for delivery of marijuana: online orders and home delivery accounted for nearly $1.4 million in total sales in May 2020.

What Are the Effects of Legal Cannabis Sales on Oregon State Revenues?

Oregon lawmakers have expressed concerns about the state budget, especially in light of the hit that the state has taken in terms of decreased sales tax revenues during the coronavirus pandemic. This is because most businesses struggled when shutdown orders were put in place, and many of these businesses have continued to struggle even after the shutdown orders were lifted. The downturn in overall retail sales has had a devastating effect on Oregon state revenues.

One industry that has not suffered during the COVID-19 pandemic is the legal cannabis industry. This has provided a boost to the Oregon budget by filling the state with much-needed sales tax revenues. Oregon imposes a 17% tax on legal sales of marijuana. Additionally, this tax number is the same for both recreational marijuana and medical marijuana.

Economists enlisted by the state government to study and analyze the effects of the legalization of marijuana on the economy have been taking a close look at what has happened during the COVID-19 pandemic. These economists believe that several factors are influencing the bump in tax revenues generated by retail cannabis sales:

  • The underlying demand for marijuana (and alcohol) is up as more people are stuck at home and looking for some form of relief.
  • More cannabis product categories and varieties are available to consumers.
  • Greater demand for marijuana products such as concentrates and edibles has led to higher prices. Thus far, the higher prices have not discouraged consumers from continuing to purchase cannabis from dispensaries.

Contact Scythian to Learn About Cannabis Real Estate

Oregon is not the only state with strong cannabis sales so far in 2020. Many other states where cannabis use is legal, including Arkansas, Colorado, and Illinois, have also seen a surge in retail cannabis sales.

Scythian Real Estate is the full-service real estate partner of sophisticated cannabis companies throughout the U.S. and already has a strong footprint in several states where cannabis is legal. For more information about cannabis real estate, email Scythian now.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Illinois Cannabis Market Is Booming

Illinois Cannabis Sales Rise
Illinois Cannabis Sales Rise

Illinois only recently started selling cannabis legally at dispensaries, but the state is already breaking records. Cannabis operators are raking in money as more and more people purchase marijuana for both recreational use and medical use. The booming cannabis market in Illinois bodes well for legalization efforts in other states as lawmakers can see the positive effects that cannabis legalization has on the Illinois economy.

Illinois Dispensaries Sell Millions of Cannabis Products

The cannabis industry is doing extremely well in Illinois, where cannabis was legalized for recreational use in June 2019. The law went into effect on January 1, 2020, which is when adult-use dispensaries opened across the state. Since that time, Illinois retail cannabis sales have steadily increased each month. In June, the most recent month for which sales data is available, Illinois cannabis shops sold $47.6 million worth of marijuana products. This number set a new monthly record, topping the previous high of $44 million just one month earlier.

There are nearly 60 dispensaries currently licensed to operate in Illinois. These state-licensed dispensaries sell recreational marijuana and medical marijuana. Since marijuana was first legalized at the beginning of 2020, Illinois dispensaries have sold more than $250 million in cannabis and cannabis-related products. According to the Illinois Department of Financial and Professional Regulation (IDOR), Illinois retail marijuana stores have made nearly one million individual sales of marijuana and marijuana products, with each purchase averaging around $48.

Increase in Illinois State Tax Revenues from Legal Marijuana Sales

The coronavirus pandemic has been disastrous for Illinois tax revenues due to early shutdown orders for most retail businesses, as well as the reluctance of many state residents to venture outside and enter retail stores even after the shutdown orders were lifted. But the same is not true of tax revenues from the legal sale of cannabis in Illinois. In fact, the cannabis industry is one of the few industries that has managed to thrive during the COVID-19 pandemic. While overall sales tax revenues in Illinois are currently down by more than $181 million when compared to the 2019 fiscal year, marijuana sales tax revenues continue to rise each month.

Although sales tax numbers for the month of June have not yet been released by the Illinois Department of Revenue, sales of cannabis have generated tens of millions of dollars in revenues for the state already in 2020. Government data shows that Illinois collected $52.7 million in sales tax from the legal sale of cannabis during the first five (5) months of 2020. Remarkably, this is almost double the amount that state lawmakers projected before cannabis use became legal in Illinois. Moreover, these figures are expected to rise even higher in the future as the cannabis industry becomes more accepted in the mainstream and better understood as a fundamental part of the U.S. economy.

How Cannabis Sales Tax Works in Illinois

Cannabis sales tax laws in Illinois work differently than similar sales tax laws on other types of retail products and goods. Illinois imposes different tax rates on cannabis based on the potency of the cannabis: 10% at the lowest end of marijuana potency and 25% at the highest end of potency.

The revenues generated from taxes on cannabis sales in Illinois are used to fund different government programs and agencies:

  • General fund: 35%
  • Community development revitalization program: 25%
  • Substance abuse and mental health programs: 20%
  • Legislative bill backlog: 10%
  • Law enforcement agencies: 8%
  • Public education and analysis of marijuana legalization: 2%

Any additional revenues generated from sales tax on legal cannabis in Illinois are used for the state’s general revenue fund.

Illinois Cities and Towns Benefit from Legal Cannabis Sales

Although dispensaries first started operating in Illinois on January 1 of this year, local municipalities such as towns, cities, and counties did not begin adding their own taxes until July. When this happened, the purchase price of cannabis products increased slightly: early estimates put the increased prices at somewhere between 3% and 3.75%. While customers now have to pay a little more for recreational and medical cannabis purchased at retail cannabis stores, Illinois municipalities will benefit greatly from the additional tax revenues generated by cannabis sales.

One aspect of legal marijuana sales that doesn’t always get the attention it warrants is the extent to which recreational cannabis helps to infuse local economies with much-needed cash through sales to out-of-state consumers. Sales data shows that roughly 25% of all adult-use recreational marijuana sales at Illinois dispensaries comes from buyers who travel across state lines.

Contact Scythian Cannabis Real Estate

Many investors are looking into cannabis real estate investing, which has provided strong returns as retail cannabis sales surge across the U.S. Scythian Real Estate is a cannabis real estate fund that specializes in retail properties. Scythian has partnered with some of the largest cannabis operators in the country, including Curaleaf and The Green Solution. For more information, email Scythian Real Estate today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Colorado Weed Sales Setting Records

Colorado Weed Sales
Colorado Weed Sales

It’s been one record month after another for recreational marijuana dispensaries in Colorado so far in 2020. According to data collected by the Colorado Department of Revenue’s Marijuana Enforcement Division, retail cannabis shops collected nearly $160 million from consumers during the month of June – a new record high for the state. If these trends continue as many expect, the future looks bright for cannabis operators doing business in Colorado.

All-Time High for Colorado Recreational Marijuana Sales in June 2020

In June 2020, consumers of recreational marijuana in Colorado legally purchased $158,102,628 from adult-use cannabis dispensaries. This figure represents a new all-time record for cannabis sales in the state. In fact, this is the first time since Colorado legalized cannabis for recreational use that retail cannabis sales have exceeded $150 million in a single month. The previous high for recreational cannabis sales was $149,186,615, a number that was reached in May 2020. Moreover, sales of marijuana products in June 2020 saw a massive year-over-year increase from June 2019, when recreational marijuana sales totaled approximately $122.4 million.

How Has COVID-19 Pandemic Affected Colorado Cannabis Sales?

Most retail businesses operating in Colorado have struggled during the coronavirus pandemic. Interestingly, the COVID-19 pandemic seems to have had the reverse effect on marijuana businesses in Colorado: legal cannabis sales are setting industry records with each passing month. This is likely a result of dispensaries being allowed to remain open as “essential businesses” while many other types of retail stores were forced to temporarily shut down.

The surge in spending on cannabis in Colorado can also be attributed to the coronavirus in another way: as people found themselves forced to stay indoors for weeks and even months, many sought out relief in the form of recreational marijuana. This continued a trend among Colorado marijuana consumers, with the percentage of Colorado adults who reported consuming cannabis nearly doubling since 2017. Additional reasons for the steady rise in cannabis sales in Colorado likely include expanded availability as more dispensaries open in new local markets, a wider variety of cannabis products being made available to consumers, and years of campaigning by pro-legalization groups finally paying off as more people begin to accept cannabis use the same way they accept alcohol consumption.

Medical Marijuana Sales in Colorado Remain Strong

It wasn’t all good news for Colorado marijuana sales: medical marijuana sales declined slightly in June, according to Marijuana Enforcement Division data. Medical dispensaries reported selling just under $41 million in medical cannabis products, which represented a slight decline from the $43 million sold the previous month. Despite this minor dip in the medical marijuana market, however, combined sales of recreational cannabis and medical cannabis still set a new record for total volume in one month with nearly $200 million.

Current projections indicate that overall cannabis sales in Colorado this year should also set a new annual record. Colorado dispensaries generated roughly $1.75 billion in cannabis sales in 2019, with just over $800 million in sales during the first six months of 2019. So far in 2020, Colorado dispensaries have sold nearly $980 million in cannabis products. Cannabis industry observers expect that total sales of marijuana in Colorado this year could approach $2 billion.

Additional Tax Revenues from Cannabis Sales in Colorado

One of the positive consequences of increased cannabis sales in Colorado is that the state has been generating additional tax revenues. According to the Colorado Department of Revenue, the state collected more than $33 million in taxes and fees on sales of recreational and medical cannabis in June 2020. Additionally, the projected data indicates that Colorado generated more than $36 million in cannabis sales tax revenues in July 2020. Over the first half of 2020, Colorado has collected $203 million in cannabis taxes. (To put that number in perspective, consider that the state collected approximately $300 million in cannabis revenues during the entirety of 2019.)

Contact Scythian for Information on Cannabis Real Estate

Scythian Real Estate is the trusted real estate partner of several major cannabis companies operating in some of the most exciting cannabis markets in the U.S. The Scythian Real Estate Fund includes dozens of retail cannabis properties valued at $40 million.

To learn more about cannabis real estate, send an email to Scythian.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.