2023 Year-End Review
It was another challenging year for the cannabis industry. The US cannabis MSOS ETF is in a 1,056-day drawdown and is down 87.29% from peak to trough. For the year, MSOS ended +0.29%, while the global YOLO ETF fell 16.11%. US cannabis outperformed global names as the potential for rescheduling affects plant-touching US operators the most. There was considerable dispersion among top companies. AYR Wellness (CSE: AYR, OTCQX: AYRWF) finished +50.00%, while The Cannabist (NEO: CBST, OTCQX: CBSTF) sunk 40.03%. Glass House Brands (NEO: GLAS, OTCQX: GLASF) gained 147.64%, while most of California suffered, and Grown Rogue (CSE: GRIN, OTCQX: GRUSF) continued to excel and jumped 180.00%. The Department of Health and Human Services (HHS) recommending cannabis be moved from Schedule I to Schedule III was the top story in 2023. Schedule I and II drugs are subject to the 280E tax code that prevents plant-touching operators from taking ordinary deductions and often doubles MSOs’ effective tax rate. Schedule III would remove 280E, open medical research, and increase institutional participation. The HHS announcement coming on August 29 was ahead of the most optimistic expectations. This pulled the timeframe for entire rescheduling process forward and gave a positive indication on where we may ultimately land—the DEA has never gone against an HHS scheduling recommendation. The next step is for the DEA to respond with its own recommendation. Maryland’s successful launch of adult-use sales was the second-biggest event in 2023. Sales more than doubled after the flip, which boosted 3Q earnings. There are approximately 34 MSO-owned stores in Maryland and Curaleaf (TSX: CURA, OTCQX: CURLF), Green Thumb Industries (CSE: GTII, OTCQX: GTBIF), Verano (NEO: VRNO, OTCQX: VRNOF), TerrAscend (TSX: TSND, OTCQX: TSNDF), Ascend (CSE: AAWH, OTCQX: AAWH), and Goodness Growth (CSE: GDNS, OTCQX: GDNSF) all have the state limit of four stores. Ohio voting in favor of adult-use sales was the third-biggest event last year. With 12 million people, it is the seventh-largest state and home to roughly 40-MSO owned stores. Verano (NEO: VRNO, OTCQX: VRNOF), Green Thumb Industries (CSE: GTII, OTCQX: GTBIF), Cannabist (NEO: CBST, OTCQX: CBSTF), Cresco (CSE: CL OTCQX: CRLBF) and Acreage (CSE: ACRG OTCQX: ACRHF) are at the five-store cap.
Water Tower Research is built on the foundation of democratizing information flow. We bridge the growing information gap between companies and investors through our investor engagement strategies and open-access research platform.
Our research analysts are Wall Street veterans with the experience and knowledge to work with companies and investors in tandem. We provide access to the information and content that anchors the due diligence process for both professional money managers and individual investors. We leverage traditional research distribution channels and the best of modern digital strategies and tactics to amplify this information flow globally to engage all categories of investors and stakeholders.
Information flow is the foundation for creating investor awareness, knowledge, and engagement. Our mission is to help companies and investors have the tools they need and achieve their goals.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.