NEW YORK – Share prices for Cannabist Co. Holdings Inc. rose 5.6 percent Monday after the company announced its intention to exit the Florida market. The significant corporate restructuring is part of a plan to save $10 million annually and shift the organization’s focus to stronger markets.
“Florida clearly was not an ideal market for us,” said David Hart, chief executive officer at The Cannabist Company (formerly Columbia Care). “You can see we disclosed the financial performance for 2023 — and for Q1, it was our worst-performing market.”
During 2024’s first quarter, Florida represented just 5 percent of the company’s total revenue. The company reported a net loss for 2023 of nearly $19 million.
“In Florida, for example, our asset base is not commercially optimized, with more cultivation capacity than our retail locations require,” said Hart. “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,
The statewide divestment entails a workforce reduction and the sale of the company’s fourteen retail locations, three cultivation and manufacturing facilities, and its license. At the time of the announcement, the company had collected letters of intent for multiple transactions and $2.75 million of deposits in escrow.
The Cannabist also closed one underperforming retail location in Trinidad, Colorado, near the New Mexico border, bringing the company’s Colorado retail footprint down to twenty-two shops. While the border town enjoyed a cannabis boom for many years, legalization in New Mexico reportedly has dismantled Trinidad’s once-flourishing market.
“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,” said Hart, who was promoted to CEO in January. “Our focus is on building a better business, positioned for profitability and long-term sustainable growth. We are decisively leaning into the markets that are best positioned for growth and strategic upside, while also monetizing underperforming and non-core assets.”
The Cannabist operates more than 100 facilities in 14 U.S. jurisdictions, including 81 dispensaries and 23 cultivation and manufacturing facilities.
Despite Monday’s modest gain, Cannabist Co. Holdings Inc. stock still sits near the company’s 52-week low of $0.17 per share.
According to Hart, the corporate restructuring represents as much as $20 in annualized improvement in adjusted EBITDA. The Florida exit appears to be proof of Hart’s explicit intention to deliver a more sustainable business with stronger margins and a better path to free cash flow generation.
