As the last remaining available slots get snapped up for commercials during this year’s Super Bowl, broadcaster CBS turned away a potential suitor from the legal marijuana space. Despite the broadcaster’s refusal, there’s been enough progress in the legalization of cannabis for multi-state operators in the US to potentially try again and for years to come; a group that includes Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF), Curaleaf Holdings, Inc. (OTC:CURLF)(CSE:CURA), MedMen Enterprises Inc. (CSE:MMEN) (OTC:MMNFF), Acreage Holdings Inc. (CSE:ACRG) (OTC:ACRZF), and Green Thumb Industries (CSE:GTII) (OTC:GTBIF).
While the Super Bowl snub may have dissuaded companies from trying again this year, the sector is finding new and creative ways to market their wares through popular channels. Despite CBS turning down Acreage Holdings Inc. (CSE:ACRG) (OTC:ACRZF) for an advertising slot during the Feb. 3 game, future cannabis commercials seem quite likely. The proposed ad was to feature two subjects who’ve benefited from medical marijuana—a veteran with combat injuries and a child with seizures. It was a call to political action, rather than pitching the brand.
The march toward legalization took many large steps in 2018, including the first FDA approval of a cannabis drug in the US, and the federal legalization of hemp-derived cannabidiol (CBD) in the 2018 Farm Bill.
With the departure of anti-pot former Attorney General Jeff Sessions, more states willing to vote on legalization, and other factors, it appears that the federal legalization of the drug is close to inevitable.
As public opinion on the subject in favour of legalization continues to drift into a supermajority, Super Bowl broadcasters won’t always be able to say no to $5 million spots from cannabis companies. In the meantime, companies such as Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF) are finding innovative ways to get their brand known while accumulating a multistate footprint higher than its competitors.
From Sea to Shining Sea
If the NFL playoffs’ ratings were any indication, this year’s viewing audience is likely going to be quite large. The AFC Championship Game alone drew a massive 53.9 million viewers, while the NFC Championship Game drew an equally respectable 44.1 million viewers. Since 2010, the Super Bowl has annually drawn far more than 100 million viewers. But with the gatekeeping of its ads currently shutting out cannabis companies, it’ll be up to these firms to get creative in how it gets the word out about their products.
As new states become legal, there has been a rise of the MSOs (multistate operators). Among the most prominent of this class of companies is Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF). With an industry-leading footprint consisting of 60 licenses in 12 states, with planned expansion into additional states by 2020.
Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF) retains 100% license ownership and control in Arizona, Arkansas, Florida, Ohio, Pennsylvania, and Massachusetts. The company also has ongoing operations in Arizona, Maryland, Florida, California, and Colorado, with plans to build in the major markets of Nevada (Las Vegas), and California (Los Angeles).
By the time Super Bowl broadcasters are open to allowing companies like Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF) to advertise, they’ll have an even wider footprint across the USA. So far, the company’s strategy has been to prudently accumulate licenses, and win approvals through a carefully vetted pipeline of targets.
The company’s plan for expansion is to span across 14 states, with an array of 100 retail stores by 2020. So far, the company has applied for (and won) licenses in 10 states, and has a track record of 13 for 14 in obtaining rights in each category, including vertical, retail cultivation, and processing licenses. Currently, there are a total of 22 retail, 4 cultivation, and 6 processing licenses in the pipeline. As an early mover in the space, Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF) actively sets an example for other MSOs to follow.
Additional MSOs On the Move
Coming off its failed bid to be featured during a Super Bowl commercial break, Acreage Holdings Inc. (CSE:ACRG) (OTC:ACRZF) is moving forward in its multistate approach. Acreage somewhat recently acquired Form Factory, Inc., a multi-state manufacturer and distributor of cannabis-based edibles and beverages, in an all-stock transaction valued at $160 million.
Making a strong push to become a national name with its chain of branded dispensaries, MedMen Enterprises Inc. (CSE:MMEN) (OTC:MMNFF) is primarily focused on the cannabis retail sector. The company’s strategy has delivered growth successes, with the latest financials from the company showing a 40% increase in revenue from Q1 to Q2. Those revenues rose to $29.9 million, while proforma revenue (which includes revenue from pending acquisitions) came to $49.5 million.
With licenses spanning 8 states, Green Thumb Industries (CSE:GTII) (OTC:GTBIF) is expanding, having recently entered the Florida market, through its RISE Deerfield Beach cannabis retail space. The Florida opening marked GTI’s 15th store in the US. Among multi-state operators in the US, GTI is projected to have a 2019 Revenue, with $184 million—behind Harvest Health’s projected $257 million.
With the addition of a newly won processing license in Ohio, Curaleaf Holdings, Inc. (OTC:CURLF) (CSE:CURA) caught up to Harvest Health & Recreation Inc. (CSE:HARV) (OTC:HTHHF) with a presence in 12 states. Curaleaf now currently operates 10 processing facilities across the country, and manages 42 dispensaries. With a market cap of $2.85 billion that’s closing in on $3 billion, Curaleaf is quickly becoming one of the largest multistate operators in the cannabis space.
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