Marijuana MSO The Cannabist Co. exiting Florida in corporate restructuring

The Cannabist Co. on Monday announced a restructuring plan expected to save the marijuana multistate operator $10 million in annual operational expenses.

The cost-cutting initiatives, according to a news release, include:

• Divesting all assets and licenses in Florida.
• Closing an underperforming retail store in Trinidad, Colorado.
• Shuttering two stores in New York and reducing operational hours at two of its medical marijuana dispensaries in the state.

“As we have made clear since the beginning of 2024, under new leadership, The Cannabist Company will look very different by the end of this year in terms of our operational footprint, overhead expenses and de-risked financial profile,” CEO David Hart said in a statement.

“Our focus is on building a better business, positioned for profitability and long-term sustainable growth.”

As part of those efforts, the New York-based MSO is targeting certain markets for growth while selling off underperforming and noncore assets in others.

The Florida restructuring, implemented June 14, includes the divestiture of 14 MMJ dispensaries, three cultivation and manufacturing facilities and its license.

The assets have drawn letters of intent from several buyers and $2.75 million transferred in escrow, according to the release.

The Cannabist hired ATB Securities as an adviser for the Florida transactions.

The Florida assets accounted for less than 5% of the company’s first-quarter revenue of $122.6 million, down 4.4% year-over-year.

In New York, the company is reducing operational hours at its MMJ stores in Brooklyn and Riverhead and closed its Manhattan and Rochester locations permanently because of lease expirations.

The Cannabist Co. said it will continue searching for new locations for those licenses.

The MSO is targeting growth in Delaware, New Jersey, Ohio and Virginia.

Last week, the company opened a retail outlet in Richmond, its 11^th store in Virginia, and has another location the state in development.

The company plans to open its third store in New Jersey in the fourth quarter in Mays Landing.

The Cannabist Co. said it’s upgrading its five MMJ stores in Ohio with an eye on converting to adult-use sales later this month and expanding cultivation.

In Delaware, the company is prepping for recreational sales at its three locations in Rehoboth Beach, Smyrna and Wilmington.

Hart told analysts in March during a fourth-quarter and year-end earnings call that The Cannabist planned to focus on the wholesale side of its business in 2024 after an “arduous 2o23.”