As Connecticut continues to wrestle with the idea of legalizing recreational marijuana, a Massachusetts cannabis operator is positioning itself as a market leader.
Curaleaf, headquartered in the Bay State town of Wakefield, is already the world’s largest cannabis company by sales, with expected annual revenue this year of roughly $1 billion. That valuation is driven mostly by its high-profile acquisitions of Chicago cannabis cultivator and retailer Grassroots for $830 million in July, and of Oregon’s Cura Partners for about $400 million in February.
In March, Curaleaf acquired three Arrow Alternative Care dispensaries in Connecticut, including the one at 814 E. Main St. in Stamford, for an undisclosed amount. On Oct. 12 it announced it was rebranding the Arrow facilities – as well as the Grassroots Herbology dispensary in Groton – as Curaleaf dispensaries.
According to CEO Joseph Lusardi, such moves have made Curaleaf the largest national retail dispensary brand in the U.S., with 92 dispensaries, 22 cultivation sites, and over 30 processing sites in 23 states, making it one of the largest multistate cannabis operators in the U.S.
“The rebranding of these locations directly aligns with our strategy of building strong, national brands that are renowned for high-quality products, backed by science, that deliver exceptional customer satisfaction,” Lusardi said. “Overall, we are extremely proud to be active partners within these local communities and we look forward to building long-lasting relationships with them.”
Expanding its medical marijuana presence in the state is very much front of mind, according to Patrik Jonsson, Regional President Northeast.
“Curaleaf is one of four licensed growers in Connecticut and operates a 60,000-square-foot cultivation facility in Simsbury,” he noted. “That provides high-quality cannabis products to over 9,000 patients statewide through our four dispensaries as well as wholesale channels.
“Our business continues to grow in the state, with both our cultivation and manufacturing operations having seen big increases in 2020,” Jonsson continued. “As we look towards the future, we will be evaluating all our options on how to expand in order to keep up with the expected demand in the state.”
The firm would appear to have the deep pockets to continue growing. It raised $400 million in its initial public offering in October 2018. In addition, its two largest stockholders are Executive Chairman Boris Jordan — an American native who made the bulk of his money as an investment banker in Russia and who Forbes called the “only pot billionaire” in 2019 – and Russian billionaire Andrei Blokh, who made his initial fortune in the oil and dairy sectors.
Meanwhile, according to an Oct. 15 Reuters story, CURLF stock, like that of U.S. competitors Cresco Labs Green Thumb Industries, has grown in value by more than 20% since the presidential debate on Sept. 29, which the report said was reflective of growing confidence of a Joe Biden victory in November. (Biden says he favors decriminalization of cannabis, but not legalization at the federal level.)
“Even if President Trump wins a second term,” Reuters noted, “changing views on marijuana laws among voters and lawmakers have brightened the outlook for the (cannabis) industry.”
On the ballot
Voters in Arizona, Montana, New Jersey will consider legalizing recreational marijuana next month, while those in South Dakota will decide on both medical and recreational cannabis and Mississippi will consider legalizing medical marijuana. If all of that comes to pass, there would be 15 states with some form of legalization; based on population, over a third of Americans would live in a state with legalized marijuana – although only Illinois and Vermont approved it through their state legislatures, as opposed to ballot measures.
Connecticut, famously, is not one of those states.
A Gallup poll conducted this month found that 66% of U.S. adults support legalization, while another conducted in September by Pew Research Center reported 62% in favor (“double what it was in 2000,” Pew noted) and a June poll conducted by the Hartford Courant and Sacred Heart University found 69.1% of residents in favor of legalization.
Additionally, a study published last month by the University of Connecticut estimates that aggregate new state tax revenues from legalization over five years would range from $784-$952 million; in addition, direct local tax revenue is projected at $71 million over five years, with $21 million in year five alone. New employment is projected to increase from 5,669-7,418 in year one to 10,424-17,462 in year five.
Connecticut legislators have debated legalization for the past several years – most state Democrats are in favor of it, while most Republicans oppose it – but everyone expects the issue to be raised again during the next regular General Assembly session, which convenes on Jan. 6.
Curaleaf is one of the U.S. marijuana sector’s largest lobbying companies, having spent $1.37 million on federal lobbying last year – the third-highest amount. Through June 30, it has spent $390,000 on federal lobbying.
“As a company, our mission is to make cannabis more accessible and inclusive,” Jonsson said. “Cannabis has become a mainstream health and wellness solution for people around the world, and we also believe that cannabis can help state budget shortfalls through additional tax revenue and job creation.
“As an industry leader, we’ll continue to work towards ensuring our industry can reach its full potential and bring its significant economic and societal benefits to bear,” he continued. “In Connecticut, we anticipate adult-use will be at the forefront of legislature next year. We will continue to monitor the laws in the state, abide by all regulations, and remain focused on continuing to meet the needs of our medical use patients.”
Meanwhile, Jordan indicated in an Oct. 15 interview with Benzinga his confidence that legalization is definitely coming to the Nutmeg State, following New Jersey’s expected passage next month; various surveys have said at least 61% of Garden State residents are in favor of the idea.
“New Jersey is a watershed for the East Coast,” Jordan said. “New York, Pennsylvania and Connecticut will follow suit and become recreational.”
