Benzinga - by Adam Eckert, Benzinga Staff Writer.
Floridians are set to vote on a recreational marijuana constitutional amendment in November. Several key cannabis players are preparing accordingly.
What To Know: A panel of cannabis executives convened Tuesday at the Benzinga Cannabis Capital Conference in Hollywood, Florida to discuss the economic pulse of the cannabis market.
“Florida has today a million medical card holders, 23 million people living in the state, 130 million, I think, visitors a year — it’s going to be huge,” says AYR Wellness CEO David Goubert said, referring to the vote.
At the beginning of April, the Florida Supreme Court proposed Amendment 3, which would legalize adult non-medical personal use of marijuana products and accessories. If approved, the proposal would take effect in May 2025.
Recreational adult use approval in Florida would be a major step forward for the industry given that Florida is the largest medical market, Goubert says. When approval occurs, sales usually go up between two and three times, he added.
Aaron Miles, CIO of Verano Holdings, is also very optimistic about the proposal in Florida.
Verano’s strategy involves establishing a presence in states with limited licenses, taking market share and positioning itself ahead of adult-use legalization, he said. In Florida, the company already has 74 dispensaries and nearly 3,000 square feet of cultivation.
Miles echoed a lot of what Goubert said about the sales boost that comes with recreational cannabis legalization and suggested that the proposal in Florida could have huge impacts on the company and the industry as a whole. Florida has rules in place that make operations more profitable for cannabis companies as well, he added.
“What we’re doing is making sure that we are going to be able to maximize every ounce of demand that would come out of the state,” Miles said.
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Jesse Channon, president of The Cannabist Company, said the entire cannabis industry is excited about potential regulatory changes in Florida this year. He suggested that the conversion to recreational use in Florida is inevitable and noted that his company is already preparing for additional states.
Other states with regulatory changes on the horizon include Virginia, Ohio, Pennsylvania, Delaware and West Virginia, he said.
“We deployed an enormous amount of Capex early on in building scaled facilities in pretty much all of the markets that I just mentioned, so as those markets mature and as they ultimately come to conversion for adult use, we’re really well positioned moreso than we have been in other markets prior,” Channon said.
AdvisorShares CIO Dan Ahrens provided an investment perspective on the regulatory situation. Ahrens is the portfolio manager for the AdvisorShares Pure US Cannabis ETF (NYSE:MSOS) and the AdvisorShares Pure Cannabis ETF (NYSE:YOLO).
In general, he tries to manage the funds “gently” without a ton of movement, but when there is extra money in the fund, Ahrens looks to position in places with regulatory momentum, like the potential adult use legalization in Florida, he said.
“All of the MSOs are very state-focused because we all know even if we get federal reform that we’re all expecting, there’s still going to be a state focus for adult use,” Ahrens said.
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