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Hey, everyone! Nicolás Rodríguez and Patricio Liddle here. On this Veterans Day, we invite you to read Juan Spínelli’s powerful article on the urgent need for psychedelic-assisted therapy for veterans battling PTSD.

Today’s newsletter also covers the latest twists in the cannabis industry—from the post-election stock dives and mixed earnings reports to the hemp industry's uncertainties with the upcoming Farm Bill. We also spotlight Puerto Rico's burgeoning medicinal cannabis market, a "diamond in the rough" poised for significant growth. Let’s dive into today’s stories! 

Post-Election Blues: Stocks Dive, Earnings Reveal Mixed Recovery

After the blow from Florida’s missed opportunity to legalize adult-use cannabis and the impact of a GOP-controlled Senate, cannabis stocks took a dive. Amendment 3’s failure led to sharp drops for Tilray, Curaleaf, Trulieve, and Canopy, with Trulieve’s stock plummeting after a $110 million investment in Florida’s legalization campaign. While the broader industry grappled with political setbacks, recent earnings reports provided further insights into the cannabis sector’s state of affairs.

• Cresco Labs Inc.: Q3 revenue of $179.8 million marked a slight decline, down 3.2% sequentially. Yet, Cresco cut its net loss by 93% year-over-year to $7.7 million, showing improvements in operating cash flow and cost management.

• Canopy Growth Corp.: Canopy reported a 9% year-over-year drop in revenue to CA$63 million but reduced its adjusted EBITDA loss by 54% through cost-saving measures. Growth in international and medical cannabis helped offset challenges in Canada’s adult-use market.

• Leafly Holdings Inc.: Leafly’s Q3 revenue declined 20% to $8.4 million due to reduced retail accounts. Despite the drop, the company achieved positive adjusted EBITDA for a second consecutive quarter, highlighting cost discipline.

• Planet 13 Holdings Inc.: Planet 13 posted a 29.7% revenue increase to $32.2 million fueled by its Florida expansion, with net losses down significantly. The company’s focus on cultivation improvements and store growth may pave the way for future gains.

• Auxly Cannabis Group Inc.: Auxly recorded an 18% rise in Q3 revenue to CA$33.3 million and achieved record adjusted EBITDA, underscoring its focus on growth in vapes, pre-rolls, and dried flower.

• Chicago Atlantic BDC, Inc.: Chicago Atlantic reported $3.2 million in investment income in Q3, expanding its portfolio to 28 companies through a major loan acquisition, rebranding to “LIEN” to emphasize its cannabis lending focus.

• Medicine Man Technologies, Inc. (operating as Schwazze): Schwazze’s preliminary Q3 results show a 10% revenue decrease to $42 million, while debt grew amid an ongoing re-audit. However, enhanced store traffic in Colorado and New Mexico reflect a focus on operational improvements and customer experience.

Hemp’s Future Hangs On Farm Bill

The hemp industry faces a pivotal moment as proposed changes in the 2024 Farm Bill could severely impact the market for hemp-derived products like delta-8 THC. The draft bill seeks to close loopholes that allow the sale of these psychoactive products, threatening a market worth $1.2 billion in 2023. Advocates argue a ban could devastate small businesses, calling instead for regulatory oversight.

Amid this uncertainty, global projections for industrial hemp remain strong, but internal industry tensions between hemp producers and large cannabis operators are growing, highlighting the ongoing battle for market dominance and regulatory control.

Puerto Rico's Pot Potential

To wrap up today’s newsletter, let’s turn our focus to Puerto Rico’s flourishing medicinal cannabis market, now valued at over $250 million. Industry leaders like Jaime Rengifo of Prich Biotech and Noemí Pérez of GreenBook Academy credit its success to strong education, accessible products, and a unique regulatory model.

While Rengifo envisions Puerto Rico as a future cannabis export hub, Pérez is betting on wellness tourism to boost the local economy. Both see the island as a “diamond in the rough,” poised for even greater growth in 2025.

Stories In The Spotlight :

• Kentucky Gov. Beshear: 'The Jury Is No Longer Out,' Kentuckians Want Medical Cannabis

• Hemp Market Surge: How New Regulations Could Impact Growth

• How To Microdose Cannabis For Stress-Free Holiday Season: Tips For Newcomers

• Josh Kesselman, Javier Hasse And More Experts Dive Into Cannabis Market Trends At MJBizCon

Our Writers Today

Nicolás holds a B.A. in International Relations, an M.A. in International Affairs, and an M.Phil in Public Policy. He is a doctoral student in Public and Urban Policy at The New School in New York City. After working for the United Nations in 2014, Nico pivoted his research to studying the relationship between the cannabis industry and economic development.

Patricio is a development economist with extensive experience in IT, finance, and banking. He writes about the economic and social opportunities obscured by over half a century of failed drug prohibition. Beyond his professional expertise, Pato is a committed advocate for social change, passionately working to promote harm reduction and reform drug policies.

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