Sales of cannabis concentrates like wax, shatter, hash, kief, badder, crumble, and live resin have risen sharply as more and more cannabis consumers turn to new products during the COVID-19 pandemic. While many other industries struggled over the past year, the cannabis industry thrived as people in states where cannabis is legal sought out the product for consumption in their own homes. What does greater demand for marijuana concentrate mean for the cannabis industry as a whole? Keep reading this blog to find out.

Cannabis Concentrate Market Exploding in Adult-Use States

According to the most recent retail data, cannabis concentrate sales in adult-use states are up more than 40% since the beginning of 2020. Nationwide, total sales of cannabis concentrates went from $567 million in 2019 all the way to $797 million in 2020. This meant that concentrates accounted for a larger share of the cannabis retail market, with other products like edibles, tinctures, and vape pens seeing a corresponding decrease in sales and market share.

One reason that people began to flock to concentrate products is that they became more comfortable with some of the more complicated ways of consuming cannabis. For example, dabbing usually involves the use of a dab rig, which is essentially a water pipe that diffuses heat and allows users to consume waxes and concentrates. Generally speaking, when people gain more experience using these complicated devices, they begin to explore different types of concentrate, including more expensive artisanal products. Moreover, new technologies such as portable, handheld vaporizers have made it easier for cannabis users to consume concentrate.

Marijuana Concentrates Are an Alternative to Vape Products

Recent health concerns about vaping have caused a lot of cannabis consumers to shift from using vape products to using concentrates like rosin and live resin because those concentrated products are solventless and don’t contain additives. For consumers who are worried about developing a lung condition from vape oils, cannabis concentrates provide a relatively healthy alternative.

Not only do these kinds of cannabis concentrates pose fewer health risks than vape products, but they also offer stronger doses of tetrahydrocannabinol (THC) than more traditional products like cannabis flower and pre-rolls. Greater THC levels typically mean a more potent high for the user. When it comes to marijuana concentrate, the THC content can be four to five times higher than the THC content for flower. Interestingly, the concentrate market tends to feed itself because frequent concentrate users may build up a tolerance for THC that makes it impossible for them to get a good high from using cannabis flower or smoking marijuana joints; hence, these users continue to seek out concentrate. This helps to explain why the cannabis concentrate market often grows at the expense of the flower market as more time passes.

The Future of the Cannabis Concentrate Market

Globally, concentrate is one of the most popular of all cannabis products. Worldwide sales of cannabis concentrates reached $1.8 billion in 2019. The more sophisticated consumption habits of cannabis consumers, spurred in part by the coronavirus pandemic, could mean that demand for concentrate will continue to increase in the years ahead. Cannabis industry experts estimate that total annual sales of marijuana concentrate in the U.S. and throughout the world could reach nearly $6 billion by 2026.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that works with major cannabis operators in Colorado, Pennsylvania, and other states where cannabis is legal for either recreational use or medical use. Scythian also provides opportunities for individuals to invest in the cannabis real estate market. To learn more, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

As more and more states increase the minimum wage that businesses must pay to their employees, some have wondered whether this might affect the financial bottom line of the cannabis industry. However, industry experts do not believe that a minimum wage hike will have much impact on growers, cultivators, dispensaries, or the industry as a whole because most cannabis companies already pay their workers more than the proposed minimum wage. Keep reading this blog to learn more.

Cannabis Companies Pay More Than Minimum Wage in Most States

According to the 2020 Cannabis Industry Salary Guide, budtenders who work at dispensaries in states where cannabis is legal are paid, on average, $15 an hour. This is significantly more than the minimum wage in many of these states. Additionally, a lot of cannabis companies attract workers with generous benefit packages that put the workers’ annual pay well above the minimum wage. A recent survey of cannabis businesses found that roughly 90% offer benefits such as health insurance, paid leave, or a 401(k) plan to full-time employees who work at least 40 hours per week.

Some major nationwide retailers, like Target and Walmart, have announced that they will be moving toward a $15 minimum wage for all employees. However, many small businesses have not yet made that move – and it is here where cannabis companies are extremely competitive and, in many cases, are more likely to attract highly qualified job applicants.

So, why does the cannabis industry tend to offer higher salaries and greater benefits to employees? The specialized knowledge required to work in the industry and to serve knowledgeable customers often makes it difficult to find qualified workers. Moreover, cannabis businesses recognize the importance of retaining employees who are able to effectively do the job because continuity is critical to business growth.

Cannabis Businesses Thrive During COVID-19 Pandemic

While there were a number of thriving industries that paid good wages before the COVID-19 pandemic, the economic downturn caused by the pandemic forced many industries to scale back their operations and cut costs by either reducing their workforces or slashing salaries and benefits for employees. This was especially true of smaller businesses that needed to close their doors due to state lockdown orders. However, the cannabis industry actually managed to surge during the coronavirus pandemic because states declared dispensaries “essential businesses” that could remain open. The end result was that a lot of cannabis companies were able to maintain their workforces and, in some cases, even expand their workforces with increased pay rates and benefits.

Cannabis Operators Likely to Be Unaffected by Federal Minimum Wage Hike

While there has been talk in recent weeks and months of the U.S. Congress passing a $15 federal minimum wage, it appears increasingly unlikely that this will happen anytime soon. Despite the lack of a higher federal minimum wage, however, many states have been increasing their own minimum wage requirements for businesses. The highest minimum wage imposed by any state is California’s $14 an hour requirement, which applies to all businesses in the state that have more than 25 employees.

For cannabis operators with retail stores and cultivation facilities in states where cannabis is legal, the rise in minimum wage in many of these states has not made much of a difference to the businesses’ bottom lines. That’s because the majority of these cannabis operators are already paying their workers above the state-imposed minimum wage. Looking forward, any additional increases to state minimum wage requirements are also unlikely to affect cannabis companies in these states because most successful cannabis operators already factor in a higher cost of doing business – whether it’s higher salaries for workers or a “cannabis premium” imposed on real estate purchases.

Contact Scythian Cannabis Real Estate Today

Scythian Cannabis Real Estate is a privately held cannabis real estate fund based out of Denver, Colorado. Scythian has a current portfolio of cannabis properties used as retail dispensaries in Colorado, North Dakota, and Pennsylvania, as well as a pipeline of future acquisitions in states like Michigan, New Jersey, Massachusetts, and throughout the United States. If you are a cannabis operator looking to raise capital, or an individual looking to invest in the growing cannabis market, Scythian Real Estate can assist you. Contact us for more information.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Major cannabis company Curaleaf recently reported record earnings to close out 2020. According to financial and operating results for the fourth quarter of 2020, Curaleaf generated all-time high revenues for both an entire year and a single quarter. What could the recent success of Curaleaf mean for the company going forward? And what could it mean for the cannabis industry and major cannabis operators more generally? Keep reading this blog to learn more.

Curaleaf Revenues Hit Record Highs in 2020

Curaleaf Holdings, Inc. is a leading provider of consumer cannabis products in the United States. Curaleaf operates more than 100 dispensaries in 23 states, and the company also has numerous cultivation and processing sites, as well as nearly 4,000 employees and team members. Additionally, Curaleaf is a vertically integrated cannabis provider with its own in-house brands, including the popular Curaleaf and Select brands.

In 2020, Curaleaf revenues hit record highs. Moreover, the final three months of 2020 continued an upward trend that suggests 2021 could be even more profitable for the cannabis company. According to fiscal and operating results that were recently made public, Curaleaf’s Q4 2020 saw the company’s total revenues exceed $230 million. This represented a sizable 23% increase over Curaleaf’s Q3 earnings of $182 million, and a massive 205% increase over the company’s Q4 2019 earnings. These financial figures for the final three (3) months of 2020 built on the already-strong results of the preceding nine (9) months. For the entire fiscal year 2020, Curaleaf had total revenues of more than $626 million. This represented a 184% increase over company revenues for 2019.

Curaleaf Cannabis Sales Fueled by Retail Operations

A significant portion of Curaleaf revenues and profits can be attributed to the company’s cannabis sales. For 2020, Curaleaf recorded a gross profit of approximately $275 million on sales of cannabis products at dispensaries in states where marijuana can be legally sold for either recreational use or medical use. In fact, Curaleaf launched a total of 84 new cannabis products last year, with 32 of those products debuting during the last three (3) months. Curaleaf’s new product lines were the culmination of heavy investment in research and development, and many of the finalized products were sold at dispensaries acquired by Curaleaf. During 2020, Curaleaf completed acquisitions of eight (8) smaller cannabis businesses and product lines, including Grassroots Cannabis, Alternative Therapies Group (ATG), Arrow Companies, Cura Partners (Select), Curaleaf NJ, Prime Organic Therapy (MEOT), Remedy Compassion Center, and Virginia’s Kitchen (Blue Kudu). The acquisition of Grassroots Cannabis, in particular, allowed Curaleaf to expand its presence into six (6) new states, including Illinois and Pennsylvania.

As evidenced by the acquisition of ATG in Q4, the expansion of Curaleaf’s retail and wholesale operations across the United States showed no sign of abating as 2020 came to a close. In fact, Curaleaf saw its total number of retail operations expand from 51 to 96 over the course of the last year, and its retail footprint also expanded from 14 states to 23 states. The company’s retail growth was matched by its expansion in cannabis cultivation and processing: Curaleaf added nine (9) cultivation sites and 15 processing sites last year. While much of the company’s growth was a result of corporate acquisitions and mergers with other cannabis companies, Curaleaf also had organic growth that allowed for entry into new and emerging cannabis markets.

Looking Ahead to 2021: Continued Growth as Curaleaf Expands into New Cannabis Markets

So far in 2021, Curaleaf has already completed a number of significant acquisitions and deals. For instance, Curaleaf recently opened new retail stores in Florida, Maine, and Pennsylvania. Although Curaleaf already had a robust presence in all three states, the additional dispensaries should bode well for the company as it looks to continue expanding operations. Additionally, the recent store openings give Curaleaf a total of 101 retail locations that sell either adult-use or medical cannabis.

Like other cannabis companies, Curaleaf is expected to thrive as more and more states legalize cannabis for adult use. Joe Bayern, Curaleaf’s Chief Executive Officer (CEO), anticipated further growth for the company in 2021 as Arizona and New Jersey finish implementing their own rules for new adult-use cannabis markets. Both states officially legalized cannabis for recreational use in November 2020 when voters overwhelmingly supported ballot measures. According to Bayern, the legalization of marijuana in New Jersey may “accelerate the potential of future adult-use in key states such as New York, Pennsylvania, and Connecticut.” Since Curaleaf already has a strong presence in those states, the success of legalization efforts at the state level could be very good for Curaleaf’s financial bottom line in the years ahead.

Curaleaf Expected to Enter European Cannabis Market

Perhaps the biggest development for Curaleaf so far this year is its possible entry into the burgeoning European cannabis market. Curaleaf is nearing the finish line of discussions to acquire EMMAC Life Sciences Limited, the largest vertically integrated independent cannabis company in Europe. If the deal is finalized, Curaleaf would become the global leader for retail cannabis sales, and gain access to medical cannabis markets in Germany, Italy, Portugal, Spain, and the United Kingdom. Boris Jordan, Curaleaf’s Executive Chairman, called the Curaleaf-EMMAC deal a “milestone transaction” that will give Curaleaf access to a market with nearly 750 million people.

A Curaleaf press release noted that the acquisition would cost roughly $286 million and could close during Q2 2021. Once complete, the deal would provide Curaleaf with strong international cannabis revenues for the foreseeable future.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that has relationships with several of the top cannabis operators in the country. One of the companies that Scythian works with is Grassroots Cannabis, which was recently acquired by Curaleaf. If you are a cannabis operator looking to add capital, Scythian Real Estate may be able to help you. For more information, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Cannabis company Columbia Care recently announced its financial results for the fourth quarter of 2020, and the results exceeded expectations. Preliminary data showed that the company set a record high for performance in both a single quarter and in a full year. What does Columbia Care’s continued success mean for the cannabis industry more generally? Keep reading this blog to learn more.

Columbia Care Remains Industry Leader for Medical and Adult-Use Marijuana

Columbia Care Inc. is one of the nation’s biggest cultivators, manufacturers, and providers of legal cannabis, with operations in 18 states. Columbia Care, which is based in New York, was one of the first companies to provide medical cannabis in the United States. Today, Columbia Care has expanded its business to also include adult-use cannabis, but it remains an industry leader in medical cannabis operations across the U.S., including 81 dispensaries and 27 cultivation and manufacturing facilities.

In Q4 for the year ending December 31, 2020, Columbia Care established an all-time company record for cannabis sales revenues. Financial data shows that Columbia Care generated around $87 million in combined revenues in the fourth quarter, which is up more than 50% over the previous quarter and more than 230% over the fourth quarter of 2019. These figures place Columbia Care among the most successful cannabis operators in the entire country, as well as making it “the fastest growing top-tier multi-state operator.”

Nicholas Vita, the CEO of Columbia Care, said in a company press release that the record sales figures were “driven by continued revenue growth and margin expansion.” Vita specifically highlighted the company’s effective navigation of challenges brought on by the COVID-19 pandemic, which caused significant problems for many businesses in other industries. For the entire fiscal year of 2020, Columbia Care generated approximately $290 million in pro forma revenue.

Columbia Care Completes Acquisition of The Green Solution in Colorado

At the close of 2020, Columbia Care completed major acquisitions of both The Green Solution (TGS) and Project Cannabis. Columbia Care also announced its upcoming acquisition of Green Leaf Medical. The integration of TGS dispensaries into the Columbia Care portfolio is expected to make Columbia Care a leader in Colorado, the world’s largest legal cannabis market. The Green Solution has a longstanding relationship with Scythian Real Estate, a Denver-based cannabis real estate fund with more than a dozen cannabis properties that operate as TGS dispensaries. The TGS dispensaries are located across Colorado, including Denver, Fort Collins, and Black Hawk.

In the third quarter of 2021, Columbia Care’s acquisition of Green Leaf Medical is expected to be finalized. Columbia Care has already agreed to purchase Green Leaf Medical LLC for $240 million in combined cash and stock. The deal should give Columbia Care an even stronger operational footprint on the East Coast, with both cultivation facilities and retail stores in Maryland, Ohio, and Pennsylvania.

These acquisitions continue a trend of Columbia Care integrating other cannabis companies into its nationwide business model and expanding its reach into new cannabis markets. Importantly, the promising cannabis sales figures for Columbia Care do not take into account the company’s upcoming entry into the New Jersey cannabis market. New Jersey recently legalized cannabis for recreational use, with the state expected to become the largest cannabis market in the eastern U.S. and to generate $1 billion annually in the coming years. It is also possible that Columbia Care could expand into other cannabis markets if certain states, like New York and Virginia, decide to legalize cannabis for recreational use.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides major U.S. cannabis operators with financing and other operational assistance. For more information, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.