Information of widespread layoffs at hashish corporations throughout the USA has dominated headlines, however an evaluation of worker counts at America’s largest multistate operators exhibits a number of truly grew their payrolls final 12 months.
The truth that worker payrolls have been up for some marijuana MSOs on the finish of 2022 however down for others underscores how a number of elements can play a job in figuring out an organization’s well being.
These elements embrace geographic footprint, taxes, working prices and capital availability, specialists mentioned.
“The current second is the Nice Rationalization for the trade,” Paul Josephson, a New Jersey-based companion and chief of the hashish trade group on the Duane Morris regulation agency, advised MJBizDaily by way of electronic mail.
“Worth compression and profitability varies tremendously by state and even inside a state. So good operators are taking a tough have a look at the place they’re investing their human capital.”
Meaning winding down operations in some areas and investing in others with extra alternative for income progress.
The variety of workers at MSOs resembling Ascend Wellness Holdings, TerrAscend Corp., Ayr Wellness and Curaleaf Holdings elevated final 12 months in comparison with 2021, in response to securities filings.
In contrast, worker numbers at different MSOs resembling Trulieve Hashish, Cresco Labs, Columbia Care and Verano Holdings dropped, in response to securities filings.
Worker numbers at hashish tech platforms Weedmaps and Leafly Holdings additionally shrank over the course of 2022.
A report by Vangst estimates that complete employment in hashish in the USA declined by 2% – although gross sales rose by 3% from $25.3 billion in 2021 to $26.1 billion in 2022.
Jeff Wissink, a Chicago-based principal on the advisory, assurance and tax agency CohnReznick, advised MJBizDaily by way of electronic mail that downsizing and decrease head counts are a results of the lack of liquidity in capital markets, excessive taxes and the excessive prices of doing enterprise.
« That implies that whatever the market(s) during which you use, you could run an exceedingly lean operation to attain even minimal profitability, » he wrote in an electronic mail to MJBizDaily.
« Should you’re not reaching profitability, you have to perceive how lengthy your runway is from a money perspective. »
Head depend decreases alone aren’t essentially indicative of the well being of a enterprise, Wissink mentioned. Income progress and profitability are additionally vital to have in mind.
Trulieve worker depend drops
Florida-based Trulieve (Canadian Securities Alternate: TRUL; over-the-counter markets: TCNNF) had essentially the most vital drop in worker numbers, from roughly 9,000 on the finish of 2021 to 7,600 on the finish of 2022 – a 16% decline.
Throughout Trulieve’s fourth-quarter and year-end earnings name, CEO Kim Rivers mentioned the MSO is aiming for annualized progress price financial savings of roughly $100 million.
Income grew to $1.2 billion in 2022 from $938 million in 2021, which Trulieve attributed to the corporate’s:
Up to now, Rivers mentioned, the corporate has decreased wage prices by roughly 20% by eliminating redundancies associated to the Harvest Well being acquisition.
Trulieve additionally exited the Nevada market, shuttered a few of its California retailers and closed « duplicative » manufacturing property in Florida, the place it’s ramping up manufacturing at its 750,000-square-foot facility.
« The brand new facility makes use of state-of-the-art automation and a proprietary design, which we count on will yield efficiencies and cost-savings as the power ramps all year long, » Rivers mentioned on the earnings name.
The corporate didn’t reply to requests from MJBizDaily for extra element.
In line with Wissink, Trulieve and different corporations decreasing worker counts will see long-term advantages provided that they streamline underlying processes and methods.
« That means, in the event you merely cut back headcount, however don’t in the end cut back the quantity of labor that wants executed or the effectivity by which you try this work, these headcount(s) will in the end creep again in, » he famous.
Head depend, income up at MariMed, Ascend, TerrAscend
MariMed’s income grew from $121.5 million in 2021 to $134 million in 2022, and MariMed’s web revenue was greater than $13.6 million in 2022, up from $7.6 million in 2021.
Through the firm’s fourth-quarter and full-year earnings name, CEO Jon Levine attributed the outcomes to natural progress and loads of M&A.
In 2022, Levine mentioned, MariMed:
- Acquired and consolidated its Maryland vertical operation.
- Purchased an Illinois craft develop license and a dispensary license.
- Acquired a Missouri processing and distribution license.
- Gained a brand new medical dispensary license in Ohio.
« We’re very excited for Ohio and Missouri, our two latest high-growth markets, » he mentioned.
TerrAscend reported net revenue of $247 million in 2022, a 21% increase from its 2021 revenue of $194 million.
President and Chief Operating Officer Ziad Ghanem (who was recently appointed to the CEO role) attributed the growth to the company’s customer experience.
« The look and feel of our stores, the quality of our service, friendliness and efficiency are the reasons for the loyalty of our customers and patients, » he said on the company’s earnings call.
Ascend’s revenue grew 22% in 2022 to $406 million. The company reported a net loss of $80.9 million.
Frank Perullo, Ascend’s co-founder and interim CEO, attributed the growth to success in New Jersey’s new adult-use cannabis market.
Ascend also grew cultivation capacity by 40% and its dispensary count by nearly 20%.
New York-based Curaleaf hasn’t reported its full-year or fourth-quarter financial results yet.
CEO Matt Darin told MJBizDaily in an interview that the company’s employee count has increased overall despite recent layoffs and its exit from California, Colorado and Oregon because, after four years of growth, it’s time to optimize investments.
« We’re making sure that we are allocating our resources where we see the best opportunities, » he said.
« So that’s why we’re hiring and growing and expanding in places like Florida, where we continue to open new stores and continue to increase operations and launch new products. »
Weedmaps, Leafly employee counts drop
Cannabis tech platforms Weedmaps and Leafly both lost employees in the past year.
The employee count at California-based Weedmaps decreased by nearly 4%, from 607 to 583, from 2021 to 2022.
In the fourth quarter of 2022, revenue also declined for Weedmaps to $49.3 million from $54.2 million in the fourth quarter of 2021.
Full-year revenue grew to $215.5 million in 2022 from $193.1 million in 2021.
Weedmaps’ net loss was $82.7 million last year compared with a net income of $152.2 million in 2021.
Executive Chair Doug Francis said Weedmaps will focus on « driving a lean mentality » in every aspect of its operations in the coming year.
« We’ve already done the heavy lifting, removing excess layers of management across the company, simplifying processes and changing the way we work to drive sales and savings, » he said.
The head count at Leafly dropped from 236 to 204 through 2022.
Another recent round of layoffs led to the termination of another 40 employees.
Revenue grew by 10% through 2022 to $47.4 million. The company reported a profit of more than $5 million, but operating costs skyrocketed by more than 40%.
Wissink attributed the company’s challenges to the same macroeconomic issues the rest of the industry is facing.
« When things get tight, cannabis companies cut budgets on marketing, » Wissink added.
« Weedmaps and Leafly ultimately make their money on cannabis companies spending on marketing.
« They’re going to be hurt given current market trends. This goes for really any supplier of ‘discretionary spend’ to the space. »
Kate Robertson can be reached at email@example.com.