Category: Industry News

LivWell Enlightened Health, one of the largest cannabis operators in Colorado, recently started running television ads for marijuana dispensaries. This marks the first time that cannabis commercials have aired on Colorado TV. Now that LivWell is running cannabis ads on television, will other retail marijuana operators follow suit? And what could this mean for the state’s cannabis industry more generally? Keep reading this blog to find out.

Marijuana Dispensary Commercials Begin Airing in Denver, CO

LivWell Enlightened Health is one of the largest cannabis companies in Colorado, with more than 20 retail stores selling recreational marijuana and/or medical marijuana. LivWell recently started to run a number of cannabis TV ads on KUSA, a Denver NBC affiliate station. The ads feature testimonials from satisfied customers who have used LivWell cannabis products. The testimonials also praise LivWell staff and mention the cannabis retailer’s customer rewards program.

The historic commercials are the first-ever television advertisements for a retail marijuana store to air in Colorado. There have been previous attempts to air cannabis commercials in Colorado, but legal concerns and fear of action being taken by the Federal Communications Commission (FCC) prompted local networks to reject the commercials. However, as the cannabis industry becomes more accepted by the public and a part of mainstream culture, advertising restrictions for television and radio have been eased considerably.

Cannabis industry observers believe that the recent cannabis commercials could be a key moment for cannabis advertising in mainstream media like TV, print, and online ads. Michael Lord, the CEO of LivWell, noted that the marijuana retailer has been interested in generating brand awareness through traditional media “since Day 1.” Lord also said that the cannabis company hoped the TV commercials would reach consumers in the 55-and-older demographic.

Restrictions on Colorado Cannabis Advertisements

There were some limitations on what could – and could not – be said in the LivWell television ads. For example, the commercials do not explicitly use words like “cannabis” and “marijuana.” Additionally, the commercials do not depict any of the LivWell cannabis products, nor do the ads show images of LivWell dispensaries.

Other limitations on the cannabis commercials were mandated by Colorado marijuana regulations. Under current law, a cannabis TV advertisement must be broadcast to an audience of mostly adults: an ad with viewership of more than 28.4% of people under the age of 21 is not allowed. (That age is not a coincidence: a person must be at least 21 years of age in order to buy marijuana in Colorado.)

Contact Scythian Real Estate for Information on Cannabis Operator Financing

Restrictions on cannabis ads are similar to restrictions on financing for cannabis companies. Until there is clarity about federal law on marijuana, many banks won’t offer services or provide loans to cannabis businesses. If you are a cannabis operator in need of financing, Scythian Real Estate can assist you. Scythian is a privately held cannabis real estate fund that helps cannabis operators like LivWell Enlightened Health secure long-term control of their assets through sale-leaseback transactions. In fact, Scythian is currently partnered with LivWell on dispensaries located in Aurora, Berthoud, and Mancos.

If you are a cannabis operator and would like to learn more about Scythian, send us an email 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.

The prices of cannabis flower, along with the prices of other recreational marijuana products, have risen to record highs during the coronavirus pandemic. New data from retail cannabis stores throughout the United States shows that increased demand for cannabis flower has resulted in higher average sales prices, providing some indication of just how strong the cannabis market has become. What could this mean for the cannabis industry going forward, and could the increased demand and higher sales figures continue after the COVID-19 pandemic subsides? Keep reading this blog to learn more.

Higher Prices for Cannabis Flower in Colorado, California, Nevada, and Washington

While retail sales prices for cannabis flower have been increasing nationwide over the past year, prices have seen a significant spike in four states: Colorado, California, Nevada, and Washington. According to Headset, an analytics company based in Seattle, WA, wholesale flower prices are up considerably in these states over the past three (3) months when compared to sales data from late 2019 and early 2020. On average, the four states have seen prices for cannabis flower rise by approximately 17%.

The higher prices are seen as a reflection of healthy demand for cannabis product during the pandemic. When a lot of businesses either closed down or began to operate remotely, many people found themselves stuck inside for days, weeks, and months on end, and cannabis consumption became more popular than ever in states where marijuana is legal for either recreational use or medical use. This, in turn, led a lot of cannabis consumers to explore new ways of smoking or otherwise consuming cannabis. What cannabis operators soon began to notice was that some of their more popular cannabis flower products began to fly off shelves.

In Colorado, the demand for cannabis flower was particularly strong. This caused a spike in wholesale flower prices in the state, with the average market rate per pound going up by 30% over a three-month period at the end of 2020. For premium marijuana flower in Colorado, prices have gone even higher because consumers are seeking out top-tier cannabis brands like Cookies, Kaviar, and Snaxland that offer artisanal cannabis. For certain brands, the price of high-grade flower in Colorado currently exceeds $4,000 per pound.

Increased Demand for Marijuana Pre-Rolls, Capsules, and Concentrates During COVID-19 Pandemic

The increased demand, and subsequent rise in retail prices, for cannabis flower during the COVID-19 pandemic certainly stands out to cannabis industry observers. However, cannabis flower is not the only retail product that has benefitted from cannabis consumers seeking out new ways to smoke marijuana. For example, the average sales prices of pre-rolled marijuana have risen by 15% when compared to the first few, pre-pandemic months of 2020.

In addition to setting higher average sales prices for cannabis flower and pre-rolls, dispensaries in Colorado, California, Nevada, and Washington have also responded to increased demand for cannabis capsules and cannabis concentrate by raising prices on those products as well. According to data compiled by Headset, the average retail price of cannabis capsules rose by more than 11% since early 2020, and the average retail price of cannabis concentrate rose by more than 3% since early 2020.

Contact Scythian Cannabis Real Estate Today

Higher prices and increased demand for certain cannabis products certainly bodes well for the cannabis industry as a whole and especially for cannabis operators in Colorado, California, Nevada, and Washington. Scythian Real Estate is a privately held cannabis real estate fund that works with some of the most sophisticated cannabis operators in these states and others. If you are a cannabis operator and would like to learn more about Scythian, contact us 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.

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.

The cannabis industry thrived in 2020, even as plenty of other industries struggled due to the coronavirus pandemic. One major reason for the success of cannabis businesses last year was the relaxation of state and local laws that otherwise would have limited the ability of dispensaries to stay open and operate during COVID-19.

To learn more about other important changes to the cannabis legal landscape in 2020, read the other entries in Scythian’s “2020 in Review” blog series: Part 1 on states voting to legalize cannabis and Part 3 on Congress voting to decriminalize cannabis.

Cannabis Industry Sees a COVID Bump: Dispensaries Have Record Sales in 2020

While many other industries have suffered financially as a result of the COVID-19 pandemic, the cannabis industry has actually seen a massive uptick in business. Some have referred to this as “the cannabis COVID bump.” So, what explains the cannabis industry’s COVID bump?

Countless retail stores, restaurants, and other brick-and-mortar businesses throughout the United States were forced to temporarily close their doors when state-ordered lockdowns went into effect at the beginning of the coronavirus outbreak. For many of these businesses, the temporary shutdowns ended up being permanent: the loss of revenues for weeks and even months meant that the stores were unable to reopen their doors even after the lockdowns were lifted.

By contrast, the cannabis industry saw a surge in revenues as dispensaries managed to remain open during the COVID-19 pandemic. That is because retail dispensaries were deemed “essential businesses.” The “essential” designation given to these legal marijuana providers meant that they could continue operating and selling adult-use cannabis to consumers. For states where medical marijuana is legal, one strategy employed to keep the businesses open during COVID was to classify dispensaries as pharmacies.

Since the start of the pandemic, cannabis businesses have seen a huge boost in sales. States like Colorado, Oregon, and Illinois have reported record-breaking month after record-breaking month for state-licensed dispensaries. In Colorado, state cannabis sales surpassed the entire total for 2019 by October 2020. One likely reason for the surge in cannabis sales during COVID is the fact that, for the most part, dispensaries have been able to remain fully operational and open to the public.

Cannabis Industry Adapts with Marijuana Deliveries

The cannabis industry also adapted during the coronavirus pandemic: door-to-door cannabis deliveries became common in states that allow them. Certain states, such as Illinois, Michigan, and New York, relaxed their previously strict rules that limited delivery options for cannabis businesses and customers. The thinking behind these regulatory changes was that by allowing cannabis deliveries, the state could ensure that customers would not have to venture outside and potentially risk spreading the coronavirus.

The same logic was used to justify a related change to state rules in Illinois, Michigan, and New York that govern the amount of marijuana that a customer can purchase at one time: by decreasing the total number of times that customers and dispensary employees need to interact with one another, the risk of spreading coronavirus was also decreased.

Cannabis Industry Gains Legitimacy with “Essential Business” Classification

Beyond the direct advantage of dispensaries being allowed to remain open and operational during COVID, the classification of dispensaries as “essential” also had an indirect advantage of further legitimizing the cannabis industry. For many in the industry, this classification could be seen by the public as symbolic and might help to embolden those who are seeking to legalize cannabis in more states and, potentially, at the federal level.

Contact Scythian Real Estate for Information on Cannabis Financing

Scythian Real Estate is a privately held cannabis real estate fund that provides financing and operational assistance to some of the country’s most sophisticated cannabis operators. For more information, email us 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.

The prices of premium marijuana flower in Colorado continue to climb higher and higher during the COVID-19 pandemic. What could steadily rising prices for high-quality marijuana flower mean for the cannabis industry in Colorado in 2021 and beyond? Keep reading this blog to find out.

Wholesale Prices of Marijuana Flower in Colorado Set Records

Wholesale prices for marijuana flower in Colorado are currently at their highest point in nearly five (5) years. The Colorado Department of Revenue, which maintains records on legal cannabis sales in the state, recently reported that the Colorado wholesale market price for one pound of marijuana flower has reached $1,721. According to government agency records, the last time the price eclipsed $1,700 was in July 2016. Moreover, this represents a major reversal of fortune for the marijuana flower market: just two years ago, wholesale flower prices barely hit $700 per pound.

The price of marijuana flower on the wholesale market steadily increased since the beginning of 2020 – and then saw a massive spike in the last quarter of 2020. According to data provided by state-licensed cannabis operators, wholesale flower prices in Colorado went up by more than 30% between October 2020 and January 2021.

The higher prices for marijuana flower are likely an important factor in the continued explosion of cannabis sales in Colorado. Colorado cannabis operators seemed to set a new record for dispensary sales every month in 2020. For the entire year, total sales of recreational marijuana and medical marijuana in Colorado totaled more than $2 billion.

Strong Demand for Expensive Cannabis Flower Brands Amid COVID-19 Pandemic

Marijuana retail businesses have also noticed that there is a particularly strong demand by consumers for some of the more expensive cannabis flower sold by top-tier cannabis brands. Marijuana flower sold by premium brands are in high demand right now because the demand for cannabis generally has increased during the coronavirus pandemic.

At the beginning of the COVID-19 pandemic, cannabis consumers tended to stockpile cheaper cannabis flower products because they were worried about possible lockdowns and the closing of dispensaries. (Dispensaries in Colorado and elsewhere were actually able to remain open during the pandemic because states classified the dispensaries as “essential businesses.”) What ended up happening, however, is that cannabis consumers gravitated toward the more expensive, artisanal cannabis that remained on shelves after budget flower products were gone. This led to consumers appreciating the more potent marijuana products, including premium flower brands.

Consumers Paying More for Popular Marijuana Flower Brands

While greater demand and higher prices for marijuana flower is certainly good news for marijuana cultivators, some cannabis manufacturers and retailers have been forced to adjust their sales prices to account for increased costs. Ultimately, those additional costs are passed on to cannabis consumers who don’t seem to mind as the cannabis industry targets a new, more refined demographic. These days, individuals who head to their local dispensary to purchase cannabis flower tend to seek out high-quality, small-batch flower produced by premium brands like Cookies, Kaviar, and Snaxland.

Greater consumer demand for more expensive cannabis flower has prompted cannabis businesses to set higher prices. While the average wholesale price for cannabis flower in Colorado is around $1,700 per pound, some brands price their high-grade flower product at more than $4,000 per pound. The expectation among many in the cannabis industry is that demand for premium marijuana flower will not subside even after the COVID-19 pandemic is over.

New Business Strategies for Colorado Cannabis Operators During Coronavirus

Some cannabis businesses operating in Colorado are employing new strategies to try to take advantage of the increased demand for premium marijuana flower. For example, dispensaries are collaborating with branded flower companies on new product launches to put a spotlight on higher-end marijuana flower products. Additionally, premium flower brands are taking advantage of high numbers of followers on social media platforms like Twitter, Facebook, and Instagram to create buzz around new products. Beyond that, the limited supply of certain small-batch flower makes them even more desirable to consumers who don’t want to miss out.

One premium flower cultivator in Colorado that has seen a surge in sales during the pandemic is Kaya Cannabis, a cannabis company that utilizes in-house experts to cultivate unique strains of marijuana flower and other products in small batches. The Colorado-based craft growing cannabis company currently operates dispensaries located on South Fox Street in Denver, West Colfax in Denver, and West Jewell Avenue in Lakewood. All three marijuana retail stores provide customers with a wide variety of cannabis products, including premium flower brands like Kaviar and the Kaya Cannabis in-house brand. The Kaya Cannabis Santa Fe Dispensary on South Fox Street is also used as a cannabis cultivation facility.

Colorado’s Local Marijuana Market Thriving as Cannabis Industry Gains Legitimacy

Colorado’s tourism industry is struggling during the coronavirus pandemic as most people choose not to travel across state lines and risk their health. This means that the booming cannabis economy in Colorado is driven almost entirely by local residents in towns like Denver, Aurora, and Fort Collins. What residents have realized during COVID-19 is that their disposable income may be better spent on cannabis than on trips to restaurants, concerts, or movie theaters – especially if the plan for the foreseeable future is to remain indoors and at home.

The Colorado cannabis market has also thrived as marijuana becomes more accepted and is seen as a “legitimate” industry. In the recent 2020 election, voters in five states approved ballot measures to legalize marijuana for either recreational use or medical use. With several more states appearing primed to legalize adult-use cannabis in the next few years, it seems likely that cannabis will gain even more legitimacy.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that partners with sophisticated cannabis operators in Colorado and throughout the U.S. Scythian recently partnered with Kaya Cannabis on a sale-leaseback deal for the cannabis operator’s 1075 South Fox Street dispensary in Denver, CO. If you are a cannabis operator looking to unlock real estate equity and propel company growth, 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.

The cannabis business continues to be very good for Columbia Care. The company behind many of the cannabis industry’s leading dispensaries recently reported its financial and operating results for the third quarter – and the numbers are staggering. Columbia Care posted all-time highs for a single quarter in terms of revenues and profits generated from the cultivation, manufacturing, and sale of medical cannabis and adult-use cannabis. What does this mean for Columbia Care and the rest of the cannabis industry going forward? Continue reading this blog to learn more.

Columbia Care’s Cannabis Revenues Are on the Rise

Columbia Care began as a leading provider of medical cannabis in the United States, and the company is now one of the country’s largest cannabis cultivators, manufacturers, and retail providers of both medical cannabis and recreational cannabis. Columbia Care currently operates 100 different facilities, including 76 dispensaries in numerous cannabis markets.

“Our growth strategy and operational discipline resulted in Columbia Care generating another quarter of record results.”

-Nicholas Vita, Columbia Care CEO

Columbia Care generated combined revenues of nearly $180 million during Q3 2020. This resulted in a gross profit of nearly $70 million and an adjusted EBITDA of $2.4 million. These third quarter results for Columbia Care included just one month of revenues from The Green Solution (TGS), which was officially acquired on September 1. During the month that followed, TGS generated more than $9 million in revenues and more than $4 million in gross profit.

Columbia Care Acquires The Green Solution in Colorado

In addition to the strong financial results, another reason for optimism regarding Columbia’s Care continued growth is the recent acquisition of The Green Solution (TGS). Nicholas Vita, the CEO of Columbia Care, noted that the acquisition of TGS will help to solidify the parent company’s leadership position in the Colorado cannabis market. Vita added that the TGS acquisition strengthens Columbia Care’s national portfolio of cannabis brands and will provide experience and expertise as the company looks to expand into new state markets where adult-use and/or medical cannabis is either already legal or on the cusp of becoming legal.

Columbia Care Dispensaries Are Located in Top Cannabis Markets

Columbia Care has dispensaries all over the United States. Some of the key cannabis markets where Columbia Care operates dispensaries include:

• Colorado: Columbia Care revenues and gross profit in Colorado were both up 19% in Q3 when compared to Q2. These positive trends were due in large part to the acquisition of The Green Solution, the largest vertically integrated cannabis operator in the state. Columbia Care also operates a low-cost cannabis cultivation facility in Trinidad, CO.
• Illinois: Columbia Care operates a Canopy in Aurora cultivation facility and saw record revenues for cannabis flower production and cannabis flower wholesale revenues in Illinois during Q3. Columbia Care also opened an adult-use dispensary in Villa Park in September.
• New York: Columbia Care revenues in NY went up almost 25% from Q2 to Q3. This increase in cannabis revenues was fueled by the introduction of more efficient marijuana cultivation and manufacturing formats.
• Pennsylvania: Columbia Care’s Q3 revenues in Pennsylvania were up roughly 20% when compared to Q2 revenues. The surge in demand is expected to continue, prompting Columbia Care to continue pursuing expansion throughout the state.

What Does the Future Hold for Columbia Care and the U.S. Cannabis Market?

The future looks bright for Columbia Care and the United States cannabis industry in general. Columbia Care’s Q3 2020 financials showed significant growth, with a 78% increase in company profits when compared to the second quarter of 2020 and a 300% increase in profits over the third quarter of 2019. These trends are expected to continue in Q4 and into 2021.

Columbia Care expects to increase its position in California over the next year as a result of the company’s recent acquisition of Project Cannabis. Columbia Care is also expected to expand its already-strong portfolio of cannabis products with Seed & Strain, the company’s first cannabis lifestyle brand developed entirely in-house.

Contact Scythian Today for Information on Cannabis Real Estate in Colorado and Across the U.S.

Columbia Care’s acquisition of The Green Solution (TGS) was also good news for Scythian Real Estate. Scythian is a privately held fund that owns more than a dozen cannabis properties leased by TGS and operated as dispensaries. These dispensaries are located throughout Colorado, including Denver, Aurora, Fort Collins, and Black Hawk. The Green Solution is just one of the major U.S. cannabis operators that Scythian has partnered with.

To learn more about the Scythian Real Estate Fund, 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.

Third quarter revenues for major cannabis operator Curaleaf totaled $182.4 million, representing a new all-time record for earnings by the company in a single quarter. Additionally, the future for Curaleaf looks even brighter after the cannabis company completed its acquisition of competitor Grassroots Cannabis.

Curaleaf Revenues on the Rise in 2020

Curaleaf has seen its revenues and profits trending upward in 2020. Curaleaf’s Q3 revenues, which officially ended on September 30, increased by approximately 55% over the cannabis company’s Q2 revenues, and increased by a remarkable figure of 195% year over year when compared to Q2 in 2019. Those numbers come directly from Curaleaf’s financial and operating results, which were recently released by the company.

Curaleaf’s pro forma revenue in the third quarter of 2020 was $215.3 million. This was a record high for the cannabis operator. “Pro forma revenue” refers to the company’s managed revenue plus revenue from businesses that Curaleaf acquired. Curaleaf’s pro forma revenue for the third quarter includes revenue from the company’s recent acquisitions of Arrow Alternative Care and Grassroots Cannabis, which were both completed during Q2.

Curaleaf’s managed revenue in the third quarter was $193.2 million. “Managed revenue” is defined as total company revenue, as well as revenues from businesses that Curaleaf manages. The company saw a strong increase in managed revenue of 59% over the second quarter in 2020 and 164% over the third quarter in 2019. Mike Carlotti, Curaleaf’s Chief Financial Officer, said that the company anticipates “a continued rise in managed revenue” in the fourth quarter and in 2021 as Curaleaf completes its acquisition of Alternative Therapies Group in Massachusetts.

Curaleaf’s adjusted EBITDA in the third quarter was also a record high for the company: $42.3 million. Adjusted EBITDA includes earnings before interest, taxes, depreciation, and amortization. According to Curaleaf financial data, adjusted EBITDA in Q3 2020 was up 51% over Q2 2020, and a whopping 305% year-over-year increase when compared to Q3 2019.

Cannabis Sales and Profits Increase as Curaleaf Expands into New Markets

Gross profits for Curaleaf from retail cannabis sales in Q3 2020 were almost $90 million. This was a 110% increase over Q2 2020, and a massive 280% increase over gross profits from cannabis sales in Q3 2019. The surge in retail revenue was driven largely by the company’s continued growth and expansion, which included multiple new dispensary openings in Florida. Curaleaf also launched the Select brand in Illinois, Ohio, and Pennsylvania.

The strong sales revenues for Curaleaf came as the cannabis business scaled and operated dispensaries across 17 states. Moreover, Curaleaf continues to scale with an eye toward future growth, as the company recently expanded its marijuana retail sales presence to 23 states thanks to the acquisition of Grassroots Cannabis.

In addition to acquiring several major cannabis brands and companies, Curaleaf also continued to improve the operating capacity and efficiency of its own existing cannabis cultivation and processing facilities.

Curaleaf Thrives Despite Coronavirus Impact on Cannabis Market

The surge in profits for Curaleaf came even as the company was affected by the coronavirus pandemic, much like other businesses that depend on retail sales. Curaleaf sustained an estimated adverse impact of $25.6 million due to temporary store closures caused by the COVID-19 pandemic, as well as restrictions placed on retail businesses in states like Massachusetts and Nevada where Curaleaf has a significant presence.

Some of the third quarter highlights for Curaleaf included:

• Launched the Select brand in three (3) new states. Select is a popular cannabis concentrate brand with a dominant footprint in numerous state and regional markets.
• Completed merger with Grassroots Cannabis. This acquisition has the immediate effect of making Curaleaf the largest cannabis company in the world in terms of both revenue and operating presence. The merger with Grassroots also allowed Curaleaf to expand their presence into six (6) new states, including flourishing cannabis markets in Illinois and Pennsylvania.
• Completed acquisition of Maine Organic Therapy assets. Curaleaf was already managing these assets, but now the merger of the two companies has been finalized and Maine Organic Therapy has been officially integrated into Curaleaf. Curaleaf has converted and consolidated nearly all of the company’s managed entities, and Curaleaf expects to consolidate the rest of its managed entities in the fourth quarter of 2020.

Curaleaf Sale-Leaseback Deals Provide Additional Cash Flow

According to a press release issued by Curaleaf, the company generated significant cash flow from operations in the third quarter of 2020. Curaleaf reportedly has access to around $85 million in cash.

Curaleaf has continued to complete sale-leaseback deals. These types of transactions allow cannabis operators like Curaleaf to immediately improve their cash flow. For example, Curaleaf was able to raise around $41 million in net proceeds from sale-leaseback transactions in the third quarter of 2020.

The Future Looks Bright for Curaleaf

Curaleaf is the largest vertically integrated multi-state cannabis operator in the United States, with cannabis cultivation sites, cannabis processing facilities, recreational marijuana dispensaries, and medical marijuana dispensaries fully operational in 23 states. Curaleaf is a cannabis industry leader with a strong reputation for providing high-quality products and offering manufacturing and cultivation expertise. Additionally, Curaleaf’s top-selling cannabis products include both the main Curaleaf brand and the Select brand.

Curaleaf CEO Joseph Lusardi is extremely optimistic about the company’s future prospects. According to Lusardi, “Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania, and Connecticut.” Lusardi pointed to several different types of transactions that Curaleaf expects to complete in the months ahead, including organic initiatives and integration of the Select brand into Curaleaf products.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a full-service real estate partner of large cannabis operators who need access to capital. Scythian has partnered with Curaleaf, through Grassroots Cannabis, to provide access to capital via the Scythian real estate investment fund.

For more information about how you can partner with Scythian, send an email 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.