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👀 Thats A Wrap Everyone 👀

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William McNarland & Anthony Varrell
May 10, 2024

GM Everyone,

It's been a very busy week for the cannabis sector with most of the major companies reporting earnings so far. We have had some hits and some misses, but overall, the sector appears to be relatively healthy and showing some real strength among the Tier 1 MSOs. The best part about this week is that we all got to take a break from speculating over an S3 drop or being hyper-focused on Chuck’s every move on #SAFER. These reports were one big step forward for the underlying stocks; now we just need the chips to fall, and things will really start to move for this sector.

Today’s letter can be read in 7 minutes and 18 seconds.

What's Driving the Market Today?

Stock market futures are up this morning; these are the top highlights:

  1. Wall Street Rebounds: S&P 500 surged to its highest close since April due to an unexpected rise in jobless claims, boosting hopes for Fed easing.

  2. Global Rate Cut Signals: Central banks including the ECB and BoE hint at upcoming rate cuts, influencing bond yields and market optimism.

  3. U.S. Treasury Stability: Recent Treasury auctions went smoothly, signaling confidence and leading to lower yields as rate cut expectations rise.

  4. Diverse Global Growth: Positive economic indicators from the UK and a strong GDP estimate from the U.S. contrast with negative surprise indexes.

  5. Geopolitical Tensions Impact: U.S.-China relations worsen with new trade restrictions, affecting investor sentiment and Chinese market performance.

CEO Zach George on SNDL Financial Results for Q1 2024

Facts that matter:

  1. SNDL sees seasonal revenue dip from Q4, despite year-over-year gains

  2. SNDL’s gross margin hits a record 25% in Q1, significantly up from last year.

  3. SNDL holds a strong, debt-free balance sheet to fuel future initiatives.

Quick Hit: For the first quarter of 2024, SNDL reported net revenue of $197.8 million, a 4% increase from $191.0 million recorded in the first quarter of 2023. This growth reflects stronger performance in the company’s Cannabis Retail and Cannabis Operations segments. However, the revenue for Q1 2024 shows a decrease from $248.5 million in Q4 2023, which the company attributes to seasonal declines due to the high volume of alcohol purchased at Christmas and New Year’s. There is a seasonal adjustment here.

The Cannabist Company Holdings Financial Results for Q1 2024

Facts that matter:

  1. The Cannabist Company sees a 1.5% drop in revenues from last quarter’s figures.

  2. The Cannabist Company’s gross profit rises to $42.5 million, improving margins.

  3. Upcoming regulatory changes in Ohio are seen as growth opportunities for The Cannabist Company.

Quick Hit: The Cannabist Company, formerly known as Columbia Care, holds licenses in 15 jurisdictions. The company operates an extensive network of 123 facilities, including 92 dispensaries and 31 cultivation and manufacturing facilities. The company delivers high-quality products and services to both medical and adult-use markets, The Cannabist Company’s portfolio includes a variety of cannabis products such as flowers, edibles, oils, and tablets. It manufactures and markets several popular brands like Seed & Strain, Triple Seven, Hedy, gLeaf, Classix, Press, and Amber.

Coverage Initiated: New Lake Capital Partners

NewLake Capital stands out in the small-cap stock market for its strong financials and its unique position in the cannabis sector. The company’s business model operates on a simple yet efficient premise where it serves as a landlord to cannabis operations, offering real estate solutions that are both strategic and lucrative.They take in the money from the cannabis companies and manage it. The company takes a narrow, thin charge for doing that.

Curaleaf Holdings Financial Result for Q1 2024 

Facts that matter:

  1. Curaleaf Holdings reports steady growth with $339 million in revenue for Q1 2024.

  2. Curaleaf Holdings expands with new stores and product launches in Q1.

  3. Curaleaf Holdings is focused on international expansion.

Quick Hit: During the quarter, Curaleaf continued to extend its market reach, emphasized by the launch of new retail and product initiatives across the U.S. and Europe. Notably, the company opened its first adult-use store in New York’s Hudson Valley and launched several new products, including the Stir by Zero Proof, a THC beverage mix in Illinois, and Stiq, a 1g all-in-one cannabis oil vape in Arizona.

Trulieve Reports Growth in First Quarter 2024 Financials

Facts that matter:

  1. Trulieve’s Q1 revenue increases to $298 million, showing strong sales growth.

  2. Trulieve advances in Florida with new dispensary openings.

  3. The company makes additional progress on 280E taxation.

Quick Hit: Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), a U.S. cannabis company, announced its financial results today for the first quarter ended March 31, 2024, from its headquarters in Tallahassee, Florida. The company reported a revenue of $298 million for the quarter, marking a 4% increase from the previous quarter’s $287 million and $285 million reported in the same quarter last year. This growth in revenue was primarily driven by strong retail sales, which accounted for 96% of the total revenue.

TerrAscend CEO + Curaleaf, Jushi + Planet 13 Earnings Reports

Facts that matter: Join us live on Trade to Black today at 11 a.m. EST for an update on TerrAscend (TSE: TSND, OTCQX: TSNDF) stock earnings with CEO Ziad Ghanem. Afterward, Co-Hosts Anthony Varrell and Shadd Dales will share their takes on the earning reports from Curaleaf, Jushi, and Planet 13. This week was extremely busy for cannabis stock earnings; we had all the reports here on Trade to Black. These Cannabis Stocks are major companies in the Advisor Shares ETF MSOS. We have focused on critical themes like how rescheduling cannabis could help companies improve their net income, with 280E deductions becoming acceptable with the IRS. We will share these cannabis companies' executives' take on this and the outlook for the cannabis industry and, specifically their company's stock.