The Cannabist Company today announced a series of initiatives intended to improve profitability, enhance margin profile and enable cash flow generation. These initiatives include a corporate restructuring expected to generate approximately $10 million in annual cost-savings; the planned divestiture of its entire asset portfolio and license in Florida; and closing or modifying the operations of other underperforming assets.
“We are decisively leaning into the markets that are best positioned for growth and strategic upside, while also monetizing underperforming and non-core assets. In Florida, for example, our asset base is not commercially optimized, with more cultivation capacity than our retail locations require. Our retail footprint and cultivation and manufacturing capacity are better suited to balance other operators’ portfolios, meanwhile we will eliminate loss-making operations and bring in non-dilutive capital,” said David Hart, CEO, The Cannabist Company. “We will continue to capitalize on our strong asset base in profitable markets such as Virginia and New Jersey, and we are actively preparing for upcoming adult use transitions in Ohio and Delaware.”
The company is in the process of divesting its entire asset portfolio and license in the Florida market, with LOIs for multiple transactions in place and $2.75 million of deposits in escrow. Upon divesting these assets, including 14 retail locations, three cultivation and manufacturing facilities, and its license, the company will exit the Florida market, which represented less than 5% of total revenue in the first quarter of 2024.
In addition, the company has closed one retail location in Trinidad, Colorado, located near the New Mexico border. It now operates 22 retail locations in Colorado. As of June 1, the company reduced the operational hours for its New York medical dispensaries located in Brooklyn and Riverhead. It has also closed both its Manhattan and Rochester locations permanently, due to lease expirations, and will continue its search for new locations.
Cannabist is growing in other areas of the country though. The company has opened its 11th location in Virginia, with Cannabist Richmond opening on June 11, 2024. It also has one additional retail location in development in Virginia and it expects to open its third New Jersey retail location in the fourth quarter of 2024, located in Mays Landing, New Jersey.
Cannabist is preparing for the accelerated onset of adult use sales in Ohio by the end of June with an expanded garden, now at 85% capacity with an expectation to enter the second half of 2024 at 100%, and upgrades to its five operational retail locations in anticipation of increased volume. Additionally, the company is in the process of developing three additional retail locations and has plans to convert its five existing retail locations to the Cannabist retail brand.
