In the first quarter of 2024, the cannabis sector faces a mixed economic landscape with a notable sequential decline in sales across several states.

Pablo Zuanic, senior analyst of Zuanic & Associates has detailed insights into the sector's performance, particularly focusing on multi-state operators (MSOs) and their exposure across pivotal states such as Arizona, Connecticut, Florida, and others.

Q1 2024 Sector-Wide Financial Highlights

Overall, Q1 saw a downward trend in sales, except for a few states like Florida and Pennsylvania.

The most significant sales declines were observed in esportiva bet:Connecticut (-6%) and Illinois (-4%), with moderate decreases across esportiva bet:Massachusetts (-3%), Ohio (-2%), and both Michigan and Maryland experiencing a -1% change.

Pennsylvania, by contrast, reported a 3% increase, showing resilience amidst broader sector struggles. Each state showcased unique trends affecting both sales and market dynamics.

Q1 2024 State-by-State Financial Performance And Leading Companies

• California: Faced a esportiva bet:6% year-on-year decline, adjusting to a $5 billion market size. Notable MSOs like Cresco Labs CRLBF and Green Thumb Industries GTBIF have scaled back operations, reflecting a esportiva bet:strategic pivot within the state. Other prominent MSOs include TerrAscend TRSSF and 4Front Ventures FFNTF.
• Michigan: A standout in the sector with a robust 24% year-on-year growth, leading to $793 million in sales for the quarter. Despite stable retail prices, the wholesale market has presented challenges with narrower retailer spreads. esportiva bet:Leading MSOs in Michigan include Ascend Wellness AAWH, Cresco Labs, and esportiva bet:Verano Holdings VRNOF.
• Illinois: While there was a sequential sales dip, the year-on-year figures were up by 6%, hinting at a market still finding its footing with esportiva bet:increased retail establishments but facing pricing pressures. esportiva bet:Dominant players include Cresco Labs, Green Thumb Industries, and Curaleaf Holdings CURLF.
• Florida: Displayed growth stability with a slight 1% sequential increase and a 14% rise compared to the previous year. The market benefits from a esportiva bet:consistent expansion in both retail locations and patient registration, indicating sustained demand. Leading companies are Trulieve Cannabis TCNNF and Curaleaf Holdings, with significant market shares.
• New Jersey and Nevada: Both states are grappling with market saturation and deflation, although Nevada’s tourism boost offers some cushion against declining retail prices. In esportiva bet:New Jersey, key operators include Curaleaf Holdings and Green Thumb Industries. In Nevada, the market is led by companies like Planet 13 Holdings PLNHF and Curaleaf Holdings, both benefiting from the tourist influx in Las Vegas.

Q1 2024 Operational Insights And MSO Performance

The rising number of retail locations, particularly in Illinois and New Jersey, has diluted revenues per store, pointing to an over-expansion that the market may not sustain in the longer term.

Leading MSOs like Ascend Wellness, Cresco Labs, and esportiva bet:Green Thumb Industries have effectively managed their brand distribution, which is crucial ꦓas the market shifts towar𝄹ds more mainstream retail models.

Comparative Analysis: 4Q23 vs. 1Q24 Cannabis Market Trends

Sales Trends and Economic Indicators

Analyzing quarterly changes, esportiva bet:the end of 2023 and the beginning of𒁏 2024 saw varying sales trendꦇs across key cannabis markets.

California saw a continuation of downward trends, moving from a 12% YoY decrease in 4Q23 to a 6% YoY decrease in 1Q24, suggesting a slight improvement in the market's decline rate. Conversely, Michigan exhibited strong growth in both quarters, with a 24% YoY increase in 1Q24 following a 27% YoY increase in 4Q23, highlighting its robust market expansion.

In Arizona, sales slightly recovered in 1Q24 with a decline 𝕴of 6% YoY, compared to a 6% YoY decline in 4Q23, indi♔cating consistent market challenges year-over-year.

Retail And Pricing Dynamics

The sector's retail landscape reflected notable differences in store economics and pricing pressures. For example, Illinois reported a sales decrease of 4% sequentially in 1Q24 after a positive trend in 4Q23 (+3% seq).

esportiva bet:Florida's market showed stable growth in both quarters but with a slight increase in sales velocity from flat sequential growth in 4Q23 to +1% sequentially in 1Q24. Retail prices acrosꦉs these states continued to stabilize or d♛ecline slightly, impacting overall revenue per store and pointing to a trend of market saturation and increased competition.

Strategic Shifts And MSO Activities

Multi-state operators (MSOs) adjusted their operations strategically to esportiva bet:accommodate changing conditions, scaling their activities in saturated markets like New Jersey and Nevada while expanding in states like Florida and esportiva bet:Pennsylvania, where positive sales trends offered growth opportunities that co♔mpanies like Trulieve and Curaleaf capitalized onܫ.

Photo: AI-Generated Image.