Curaleaf Sees Marijuana Sales Growing Later This YearCuraleaf...

Curaleaf Sees Marijuana Sales Growing Later This Year

Curaleaf Sees Marijuana Sales Growing Later This Year

The cannabis land grab is getting more competitive.

This was illustrated by Trulieve’s $2 billion acquisition of Harvest Health last week, which gives the company access to new states such as Maryland and Pennsylvania. The deal may give Trulieve an edge as it competes with the other major U.S. multistate operators, Green Thumb Industries and Curaleaf Holdings, which have also expanded to new states in recent years. It also shows how there’s less virgin territory to conquer as legalization spreads.

The strategy for U.S. cannabis sellers has long been to get “first-mover” advantage in states as they legalize, with the hope that federal law will one day allow them to roll out products on a national scale. Florida-based Trulieve’s acquisition of Arizona-based Harvest Health followed that logic, with analysts applauding the move. It also boosts Trulieve’s footprint in Pennsylvania and gives it access to Maryland. Both East Coast markets that could approve recreational cannabis soon.

But there’s also a sense that companies need to move beyond the hunt for access to new states and focus on the resources they’ve already acquired. It was a sentiment expressed by executives of all three companies -- Green Thumb, Trulieve and Curalaf -- in interviews with me last week.

Trulieve Chief Executive Officer Kim Rivers said the deal was as much about Harvest Health’s complementary products and financial strength as geography. “It’s all about making choices,” Rivers said. “Flag planting and dots on maps have never been our strategy.”

Trulieve wants to improve its performance in the states where it’s already present, she said. The company plans to be selective with where it goes next, avoiding locations where taxes are too high. The next focus is supply-chain improvements, with an eye on getting the right mix of products in the right locations, according to Rivers.

The deal repositions the competitive standing of Trulieve, which is currently the second-largest U.S. multistate operator, or MSO, by market capitalization. It makes Trulieve the biggest MSO by retail locations and cultivation sites. Curaleaf, however, still operates in double the number of states as Trulieve. It also has more than twice as many cultivation and processing sites.