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Cannabis Summary for Sept. 20, 2022

2022-09-20 20:14 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index lost 1.13 to 40.15, while the CSE Composite Index lost 2.29 to 269.39. South of the border, Charlie Bachtell's Cresco Labs Inc. (CL) lost seven cents to $4.19 on 140,300 shares, despite trumpeting a geographic expansion of a "multimarket-leading" eponymous brand. The Cresco vape and concentrate brand will now be available in a ninth market, Florida.

While the press release was largely an exercise in advertising the "premium quality" of a "robust" lineup, it also underlined a rising focus on Florida. Cresco first entered the state last year by buying Brady Cobb's Bluma Wellness in an all-share deal valued at $213-million (U.S.). (Unfortunately for Bluma's old shareholders, that value looks a lot lower now: The 15.8 million shares issued by Cresco are today worth just $49.6-million (U.S.).) Bluma had eight dispensaries at the time, and Cresco has since opened 11 more.

The expansion comes amid a continuing rise in demand. Just last week, Florida's registered cannabis patient count (the state is medical-only) topped three-quarters of a million people, at 751,000, according to the state regulator. That is up from 612,000 a year earlier. The analysts at Beacon Securities expect it to head higher still. In a research note yesterday, they pointed out that Florida's "patient penetration rate" (the percentage of the eligible population) is 3.5 per cent, "notably short" of a benchmark that they reckoned should be 4.3 per cent. This suggests room for many tens of thousands of additional patients.

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