The Cannabis Nor’Easter
The Entire Northeast Is Going Full Adult Use
In the next twelve to eighteen months, the entire northeast of the U.S. is going to be transformed with every state moving to allow full adult use sales of cannabis. New Jersey, Connecticut, New York and Virginia have approved allowing full adult use. Pennsylvania and Maryland legislatures are in active talks about transitioning from medical to adult use as well.
This storm of activity can only be properly described as one thing: a Nor’Easter, which is a powerful winter storm that blankets the northeast with snow and causes a ton of damage. However, instead of damaging the states that legalize cannabis, those states will experience higher state tax revenues, less opioid deaths, more jobs, and less illicit activity to name just a few benefits of cannabis legalization.
The only thing likely to be damaged by this whirlwind will be the idea that cannabis should remain Federally illegal. New York remains the financial capital of not only the US but the world. The people who live and work in New York and in the surrounding New Jersey and Connecticut suburbs are about to be surprised by the sudden explosion of cannabis consumption.
At around the same time, Virginia will be pushing forward with full adult use sales of cannabis. And almost everyone who works in the Federal government lives in Virginia.
I love the absurdity that cannabis remains Federally illegal while states rush forward to legalize it inside their states. How utterly absurd will it be when the places that house the financial and political halls of power are blanketed by cannabis?
But beyond the absurdity, the financial impact will be enormous to the leading cannabis companies that have operations in those Northeast states. These states are limited license states and only a few companies have access to capital, know-how and ability to build and run scaled, efficient operations.
New Jersey should be the first northeast state to move on adult use. And the state has been a drag on the entire cannabis sector because investors were hoping that sales would start in Q3 of 2021. While New Jersey’s delays cast a pall over the sector in Q4, once sales start, the financial impact for those who are ready should be stunning.
Just consider what New Jersey could mean for Verano (OTC: VRNOF). A smart analyst who I regularly speak with thinks Verano could earn around $100 million in EBITDA from New Jersey alone. And I’m hearing that New Jersey might finally allow adult use sales by the end of March.
Verano will not be the only major Multi-State Operator to benefit from New Jersey, others include Green Thumb (OTC: GTBIF), Terrascend (OTC: TRSSF), Curaleaf (OTC: CURLF), Ascend Wellness (OTC: AAWH) and AYR Wellness (OTC: AYRWF).
After New Jersey, Connecticut should follow in Q3 of this year. Then in 2023, New York and Virginia are to follow. If on top of those states, Pennsylvania, Maryland, and Ohio (I know, not technically the northeast) legislatures approve full adult use sales, we will have the makings of a monster cannabis storm.
So, brace for impact, a cannabis Nor’Easter is on its way.