Arizona and New Jersey are the two largest markets about to open to adult-use marijuana and these three companies are moving quickly to cash in….
Harvest Health & Recreation (OTC:HRVSF), Curaleaf Holdings (OTC:CURLF), and Acreage Holdings (OTC:ACRGF) are moving quickly to cash in on new markets after citizens in Arizona and New Jersey voted to permit adult-use cannabis sales next year.
Companies that already have medical marijuana dispensaries in those states will have an edge. In Arizona, Proposition 207, the ballot referendum that was passed allowing adult-use marijuana sales, puts existing medical-marijuana dispensaries at the front of the line when applying for adult-use licenses. Adult-use sales could begin as early as March. The state has allowed medical-use marijuana since 2010 and it has 130 dispensaries, including drive-thru dispensaries.
In New Jersey, medical marijuana has also been legal since 2010, but the rollout has been slower. The state has 9 million residents, but there are only 13 medical-use dispensaries in operation.
New Jersey residents approved Public Question 1, which amended the state constitution to allow recreational-use marijuana sales. The referendum leaves it to the state to write exactly how that will work, and the state’s legislators have been working on Bill S21 to regulate the process. The state assembly’s version of the bill would cap the number of marijuana growers in the first two years; the Senate’s version of the bill would not.
Here’s why Curaleaf, Harvest Health & Wellness, and Acreage Holdings are poised to benefit from the new laws more than other cannabis stocks in Arizona and New Jersey.
Curaleaf is in a strong position to grow in both states
Curaleaf, as measured by revenue, is the largest cannabis company in the United States. It has 93 dispensaries in 23 states, including 22 cultivation sites and 30 processing locations.
In New Jersey, its Bellmawr campus is the largest alternative treatment center in the state. The company already has three licenses to operate dispensaries there and plans for a second medical-use dispensary in Bordentown. In addition, the company, which has 35,000 square feet of cultivation space in New Jersey, provides wholesale sales to other dispensaries in the state.
In Arizona, Curaleaf has nine licenses and eight operating dispensaries, which makes it the second-largest cannabis operator there. It has 119,500 square feet of cultivation space in the state.
In February, it purchased the Select Brand, and in July it completed its purchase of Grassroots, giving it access to markets in six new states.
In the third quarter, Curaleaf reported revenue of $182.4 million, a 195% increase year over year. Earnings before interest, taxes deprecation, and amortization (EBITDA) in the quarter were listed at $42.2 million, a 51% rise over the same period in 2019. That growth comes at a price, however, as the company lost $9.3 million in the quarter, up from a $6.3 million loss in the same period last year.
It is in a strong cash position with $84.6 million reported as of Sept. 30, and has reported…
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