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Pot Companies’ Hunt for New Markets Heats Up

Pot Companies’ Hunt for New Markets Heats Up

This was illustrated by Trulieve’s $2 billion acquisition of Harvest Health last week, which gives the company access to new states such as Maryland and Pennsylvania. The deal may give Trulieve an edge as it competes with the other major U.S. multistate operators, Green Thumb Industries and Curaleaf Holdings, which have also expanded to new states in recent years. It also shows how there’s less virgin territory to conquer as legalization spreads

The strategy for U.S. cannabis sellers has long been to get “first-mover” advantage in states as they legalize, with the hope that federal law will one day allow them to roll out products on a national scale. Florida-based Trulieve’s acquisition of Arizona-based Harvest Health followed that logic, with analysts applauding the move. It also boosts Trulieve’s footprint in Pennsylvania and gives it access to Maryland. Both East Coast markets that could approve recreational cannabis soon.

But there’s also a sense that companies need to move beyond the hunt for access to new states and focus on the resources they’ve already acquired. It was a sentiment expressed by executives of all three companies -- Green Thumb, Trulieve and Curalaf -- in interviews with me last week.

Trulieve Chief Executive Officer Kim Rivers said the deal was as much about Harvest Health’s complementary products and financial strength as geography. “It’s all about making choices,” Rivers said. “Flag planting and dots on maps have never been our strategy.”

Trulieve wants to improve its performance in the states where it’s already present, she said. The company plans to be selective with where it goes next, avoiding locations where taxes are too high. The next focus is supply-chain improvements, with an eye on getting the right mix of products in the right locations, according to Rivers.

The deal repositions the competitive standing of Trulieve, which is currently the second-largest U.S. multistate operator, or MSO, by market capitalization. It makes Trulieve the biggest MSO by retail locations and cultivation sites. Curaleaf, however, still operates in double the number of states as Trulieve. It also has more than twice as many cultivation and processing sites.

Trulieve-Harvest 11 126 22 3.1 million
Curaleaf 23 106 53 1.8 million
Green Thumb Industries 13 56 13 doesn’t disclose

Curaleaf Chairman Boris Jordan said his company doesn’t feel threatened by its bulked-up competitor, noting it underwent a similar territorial expansion around four years ago, when it bought assets in Maryland, Arizona and Pennsylvania. It then expanded to five more states by purchasing Grassroots for $875 million in 2020. And Curaleaf got a better deal, Jordan said.

“We think all these deals just underscore that our strategy from the beginning was right: to expand our footprint early on,” Jordan said. He estimates that Curaleaf paid around $400 million for assets comparable to those that Trulieve just paid about $2 billion for.

“It’s not that I think they overpaid, the market has just revalued since those days,” Jordan said. As evidence of the benefits of the early territorial expansion, he pointed to Curaleaf’s recent launch of Select Squeeze, a THC-beverage enhancer, which was recently rolled out in 14 states at the same time.

The federal prohibition on cannabis and related products makes it more difficult for multistate product rollouts, and an inability, in many cases, to move products across state lines makes multiple production sites in different states a necessity.

This means that regional hubs may emerge as the next goal for companies. For Trulieve, the Southeast “is an attractive hub,” Rivers said, noting that the company’s headquarters in Quincy, Florida, isn’t far from Georgia and Alabama.

Trulieve isn’t alone in seeing that logic. Green Thumb recently bought Dharma Pharmaceuticals, giving it access to Virginia, the first state to legalize recreational use in the Southeast. CEO Ben Kovler said he sees the company focused on states east of the Mississippi River, including New York, New Jersey, Ohio, Maryland and Connecticut. And the Southeast, which is behind other regions on legalization, holds extra appeal.

“That’s the Sahara of cannabis in the U.S. and there are a lot of people living there,” Kovler said.


  • 50%: A gauge of life improvement as a result of medical cannabis for patients with conditions such as chronic pain, multiple sclerosis and post-traumatic stress disorder. The study released May 11 from Project Twenty21 evaluated patients’ progress toward living a normal life after using cannabis as treatment.


“You can’t build national brands unless you have a national footprint. You’ll see other companies following in our footsteps,” said Curaleaf’s Jordan.


  • Sam Adams maker Boston Beer said it will create a research and development hub in Canada for cannabis beverages.
  • States including New York and New Jersey are passing laws that give organized labor a leg up in the nation’s booming cannabis industry, but there’s a possibility of legal challenges.
  • Trulieve announced it would buy Harvest for around $2 billion.
  • In earnings news last week, Curaleaf’s first-quarter adjusted earnings beat estimates. So did Trulieve’s revenue for the first quarter. Green Thumb Industries’ sales beat consensus estimates. Tilray shares slipped after first-quarter revenue missed estimates. CbdMd also fell after swinging to a loss in its second quarter.
  • Myconic Capital bought assets from Canabo Medical Corp., a wholly-owned subsidiary of Aleafia Health Inc.
  • After building a stake in cannabis companies, Wasatch Global Investors sold its stakes after a run-in with its own compliance department, Barron’s reported.



  • Columbia Care Inc. reports first-quarter earnings before the market opens.
  • Alcanna Inc. reports first-quarter earnings after the market closes.


  • Greenlane Holdings Inc. reports first-quarter earnings before the market opens.
  • Prohibition Partners LIVE virtual cannabis conference will be held through 5/20. The author of this column will moderate a session on the pot industry learning from its mistakes on Thursday.


  • TerrAscend reports first-quarter earnings before the market opens.
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