Good morning.
If you’re heading to Hall of Flowers, enjoy it.
If you’re not, tune in to Cultivated Live at 10 AM Eastern where we’ll be chatting with Verano CIO Aaron Miles. $VRNO ( ▲ 0.89% )
Let’s get to it.
-JB, JR, ZH
Today’s newsletter is 1,159 words or about a 9-minute read.
THIS NEWSLETTER MADE POSSIBLE BY:
💡 What’s the big deal?
VIRGINIA
Virginia is for loves (of legal cannabis)
Virginia lawmakers had a busy weekend, finalizing and sending a bill to Gov. Abigail Spanberger's desk that would finally launch a legal cannabis market in the Commonwealth.
Del. Paul Krizek and Sen. Lashrecse Aird were able to find a compromise on their respective bills, allowing Spanberger to fulfill a campaign promise, just months into her first term, to launch the long-awaited.
Former Gov. Glenn Youngkin, a Republican, twice-vetoed legalization legislation passed by the voters.
What they’re saying: "Today the General Assembly officially passed Del. Krizek and my legislation to launch an adult-use cannabis retail marketplace! With a launch date of January 2027, Virginia finally moves from legalization to a safe, regulated cannabis marketplace," Aird writes in an Instagram post following the vote to send legalization to the governor's desk.
The Virginia legislation originally passed a legalization bill in 2021, allowing for the decriminalization of possession, but Youngkin spent the following four years blocking all bills that would have established a commercial market, keeping the state in a half-in, half-out policy regime.
The bill would allow for the launch of sales on Jan. 1, 2027. It establishes a 6% state excise tax, along with a 5.3% retail tax and optional local taxes between 1-3.5%.
An untapped market: Virginia's Cannabis Control Authority only recently launched its sales data dashboard, but so far, the Commonwealth has pulled in $29 million in sales for 2026. The average price is about $10.16 per gram.
The state has roughly 5 million residents who are at least 21, which could cut into neighboring state markets, such as Maryland and Washington, D.C. Launching a commercial market could add pressure to legalize in neighboring North Carolina, which is already considering such a move.
The bill does not specific how many licenses will be made available, but it does set a limit of 350 retail locations and five Tier 5 cultivators, which can grow up to 35,000 square feet of canopy, until Jan. 1, 2028.
Existing medical operators would be able to enter the adult-use market with a $10 million conversion fee.
Well-positioned MSOs: The state is carved into five regions, each of which are served by a single vertically-integrated company.
Jushi, Green Thumb Industries, and Verano all control their own region, while the Mill Street Credit Fund acquired operations from The Cannabist in a fourth region. The remaining region was assigned to Ayr Wellness, which never opened up shop before the company announced a major restructuring and divestment plan. $GTBIF ( ▼ 0.76% ) $VRNO ( ▲ 0.89% )
-ZH
📣 Quotable
“Consumers enjoy the natural product with naturally occurring levels of THC in the hemp flower, and changing to these unreasonably restrictive testing standards would push this marketplace underground, handing it over to illicit operators because legitimate businesses can no longer sell it. That means that products are going to be untested," Texas Cannabis Policy Center director Heather Fazio told the Dallas Observer.
Texas' new hemp rules take effect on March 31.
LIT ALERTS*
New Jersey Challenger Brands | Updated
This month we're refreshing the New Jersey challenger brands.
It's clear that while independents and craft players still hold significant share, MSO brands continue to compete and are holding strong.
A highlight this month was New Jersey cultivators/wholesalers Green Lightning and the Clear who reached Challenger Brand status in two separate categories.
Green Lightning's namesake flower brand is pushing up the charts in the flower category, just as their brand, Grüv, is doing the same in concentrates. The Clear is nipping at the heels of the top 10 in vapes while their Twax brand is making noise in the pre-rolls category.
The edibles category is experiencing a resurgence with MSO brands as Verano's Bits and Curaleaf's JAMS inch closer to the top 10.
Verano already has two edibles brands in the top 10 with Encore and Savvy so they are the clear edibles leader in New Jersey. Of course having 4 of the top performing edibles stores in the state helps...
Illicit, known for high quality flower in Missouri, New York and New Jersey is now challenging the concentrates category with a very impressive opening to the year.
Check out the full list below.
As a reminder, Challenger Brands are identified by Lit Alerts as actively moving up the charts and challenging the top 10 within their respective categories.
*To learn more about Lit Alerts and get a special offer only available to Cultivated readers, visit litalerts.com.
⏩ Quick hits
A new Massachusetts Cannabis Control Commission report found that 73% of past-year cannabis users bought from a store in 2023, up from a 61% average across 2019-2023, as the state's cannabis market surpasses $9 billion in total sales. Teen use frequency was the only age group to decline over that period, while the average age of first use rose from 18.5 to 19.9 years. Full report here.
Stakeholders continue to urge Rhode Island's Cannabis Control Commission to issue the state's first 20 cannabis retail licenses among ongoing delays.
Nebraska lawmakers are considering a proposal that would protect medical doctors from prosecution or having their medical licenses revoked if they recommend cannabis to patients.
Missouri lawmakers approved a new set of regulations that would allow the state to review microbusiness license applicants for eligibility before any licenses are awarded. The lawmakers also removed a portion of the proposal that would bar involvement in the cannabis industry from anyone affiliated with a microbusiness license that was revoked due to ownership conflicts.
Over 20,000 Kentuckians are now registered medical cannabis patients, which is likely to grow under a proposal from Gov. Andy Beshear that would add 16 new conditions to the state's qualifying list.
🤝 Deals, launches, partnerships
Canopy Growth is officially Canada's largest medical cannabis company by revenue with the acquisition of MTL Cannabis. $CGC ( 0.0% ) C
👨⚖️ Lawsuits
The Social Equity Owners and Workers Association sued the City of Los Angeles, demanding that the city vet incoming license applications on a first come, first serve basis.
🧳 People moves
Steven Schneiderman announced that he is the new VP of Corporate Development at StateHouse Holdings. Schneiderman previously worked for Stiiizy.
📰 What we’re reading
A surge in older cannabis users is a boon for dispensaries | The Boston Globe
Cannabis companies operating in Illinois lost millions last year - with one exception | Crain's Chicago Business