Adam JacksonAs Pennsylvania Gov. Josh Shapiro recently asked lawmakers to sow up the cannabis question this legislative session, established medical players are looking to be first to market.
In his yearly budget speech, the Democratic leader urged the state to start allowing adults over 21 to have and use marijuana by July 1, with plans for stores to start selling it for recreational use by Jan. 1, 2025.
The decision to allow recreational use via a legislative process by lawmakers, rather than by a public vote, likely sets the stage for the state’s existing medical operators to gain the most, many of which already possess wide footprints of stores and canopy, as well as ancillary businesses.
Jushi on top
Overall, there are over 125 stores owned by multi-state operators in Pennsylvania, with Florida-based giant Trulieve (OTCQX: TCNNF) being the largest operator with 20 locations.
However, when the number of stores owned are compared to a company’s overall value, Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF) comes out on top with its 18 stores. Jushi is seen as having more potential or “torque” due to its strategic positioning, according to a note from Water Tower Research.
Data from Headset and BDSA shows that Cresco Labs, Green Thumb Industries, and Verano Holdings are also leading brands in the state. While Cansortium looks like a big player compared to the others in the state, it only operates three dispensaries.
Jersey will take a hit
Besides established medical operators’ prospects, there are others with big stakes in the game.
Fifteen minutes across the Ben Franklin bridge in Philadelphia, Curaleaf Bellmawr in New Jersey has for some time attracted out-of-state sales from the other side of the Delaware river as one of the company’s busiest stores in the nation. Adult-use access in Pennsylvania would save those visitors a bit more time, effort, and the $5 toll needed to get back into the city.
Curaleaf (OTC: CURLF) has already started prepping for that.
“I think you’ll find people use the word consolidation for (that type of) business move when really in reality it’s nothing but a reorganization,” a former employee who once developed Jersey-centric strains for the company told Green Market Report.
The source said that the firm will “likely pull down the grow at Bellmawr and use that space for either a lab or simply for consumer-packaged goods.”
“They use words like shuttering down and such to make other cannabis companies and industry players underestimate them…definitely trying to downplay everything. It’s a fake injury planting for an uppercut, for sure.”
Catching up
Beyond the analyst projections, the state has historically been known as a massively pent-up market. Despite Florida-like price compression plaguing medical operators lately, an adult-use passage would quickly catalyze demand. How that supply story plays out remains to be seen.
And on the local level, along with boxing, Philly is known as the mecca of functional glass art. Famous brands such as Illadelph have been born from the flames of the city’s underground crawlers, many of whom dabble in a variety of other artistic interests related to cannabis or glassblowing.
Green Market Report recently visited and spoke with a few prominent artists in the comfort of their lairs. They say it’s only a matter of time until “shit blows up,” as legislation catches up to an already deeply-embedded cannabis culture. Local pop-ups and online communities to share and deal art have propped it all for years.
That’s what makes the prospects so convincing. Nobody in the City of Brotherly Love wants legal weed more than those who proudly call it home. At realistic prices, operators should be in a decent position to reap the rewards. And with rescheduling likely on the horizon, their balance sheets as well.
