Cantor Fitzgerald: Curaleaf And Green Thumb Best Positioned To Thrive In Connecticut's New Cannabis Market

After Connecticut Gov. Ned Lamont signed an adult-use cannabis bill into law on Tuesday, making it the 18th U.S. state to legalize marijuana, Cantor Fitzgerald’s Pablo Zuanic shared his insights on the new market.

Curaleaf And Green Thumb To Thrive 

CT's legalization, which takes effect on July 1 and sales are expected in May 2022. should be particularly beneficial to Curaleaf Holdings CURLF and Green Thumb Industries  GTBIF in that they are the only two vertically integrated cannabis operators in the state.

“Medical retailers and producers will be grandfathered into the program,” Zuanic said.

Based on the Illinois and Michigan model, Zuanic projects that total cannabis sales in Connecticut (medical and recreational) will hit $500-600 million by the end of 2023.

In the longer run, based on the current per capita spend of around $400 in medical and recreational weed, Connecticut could develop a $1.43 billion cannabis market.

Bill Highlights

The analyst briefly pointed out some of the most important provisions of the bill, noting that current medical retailers will be enabled to transform into “hybrid retailers” adding recreational use to their services.

New recreational store licenses will be provided via a lottery system, with half of the licenses being reserved for social equity applicants. The limit is set to two stores per company, based on which Trulieve Cannabis TCNNF can apply but Curaleaf cannot.

Existing cultivators will be allowed to supply the recreational market with authorization from the Department of Consumer Protection, but only if they grant $500,000 to the Social Equity Council or partner with a social equity applicant.

“We believe the four existing medical cultivators will grab the lion’s share of the rec wholesale market initially, at least for the first couple of years,” Zuanic wrote. 

Three sales taxes will be included, which could add around $10-12 to the final price for 1/6 ounce of flower, according to the analyst.  

Impact On Neighboring States 

Connecticut’s adult-use legalization could force cannabis commissions in New York and New Jersey to finalize their regulatory processes and commence recreational sales. It could also potentially inspire the approval of recreational cannabis legalization in Pennsylvania.

“On the margin, we think the Connecticut recreational program will take some consumers away from Massachusetts recreational,” Zuanic concluded.



Photo by Kym MacKinnon on Unsplash

Market News and Data brought to you by Benzinga APIs
Price Target
Posted In: Analyst ColorCannabisNewsMarketsAnalyst RatingsCantor Fitzgerald Connecticut Cannabis marketPablo Zuanic
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

The Benzinga Cannabis Capital Conference is coming to Florida

The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.

Get your tickets now on – Prices will increase very soon!