Two New York City-based publicly traded cannabis companies lost millions of dollars last year, joining a national trend of hemorrhaging in the sector as the continued delay of federal legalization eats away at the capital-intensive businesses.
Ascend Wellness Inc., which has a footprint in seven states, lost $84.9 million against $561.5 million in revenues, while iAnthus Capital Holdings, with a nine-state marijuana industry presence, lost $7.6 million despite $167.6 million in revenue in 2024, according to an analysis of public securities filings by Crain’s.
Neither Ascend nor iAnthus responded to requests for comment for this story.
Overall, the 18 leading publicly traded cannabis companies in the U.S. lost a collective $2 billion last year despite pulling in more than $8.5 billion in revenue in 2024, Crain’s analysis shows.
The results are down a touch from similar losses sustained by public cannabis companies in 2023 — when 20 businesses lost a cumulative $2.3 billion — and in 2022 — when 24 companies lost just over $4 billion, according to past analyses by Crain’s.
The $8 billion-plus those companies have lost in the past three years reflects several unique hurdles facing the legal cannabis sector, including extremely high federal and state tax rates, misplaced optimism regarding federal marijuana legalization and expensive investments many companies made in infrastructure about five years ago.
“Nobody expected that prohibition would be lingering on for 10 years. There was a lot of money that was raised, and the returns just didn’t materialize,” said Matt Karnes, a cannabis market analyst and founder of GreenWave Advisors.
The result has left most publicly traded marijuana businesses in a deep financial hole, from which they’ve been unable to dig themselves out, experts said.
Financial headwinds
There are a few companies in the analysis that may have posted net income last year, save for large non-cash impairment charges or other one-off costs that won’t be repeated this year, Karnes said.
Karnes pointed to Verano and Florida-based Trulieve as two such examples, and noted that Verano had to eat an impairment loss of $319 million, while Trulieve spent almost $150 million on a campaign to legalize recreational marijuana in Florida — which ultimately fell short at the ballot box last November.
“Everybody else, the losses wouldn’t be as bad, but everyone’s suffering a loss because there’s price compression, revenues are falling, they’re flat to down, there’s the competition from hemp-based beverages and the illicit (marijuana) market,” Karnes said, ticking off a laundry list of financial hurdles sucking the profit out of the space. “So even though a lot of companies are trying to control costs, the headwinds are not in their favor.”
Another major ongoing factor every year is the 280E provision in the federal tax code, Karnes said, which bars cannabis businesses from claiming standard business tax deductions, thus costing the entire U.S. marijuana trade billions a year in federal taxes. The 280E provision routinely costs larger businesses — such as Verano and others — nine figures per year, Karnes pointed out.
“If they didn’t have such a huge tax provision, they’d have net income,” Karnes said.
Industry in the red
The true national financial picture is likely even worse than that for the public cannabis sector, given that two high-profile multistate operators have yet to file their end-of-year financials: Arizona-based 4Front Ventures Corp. and Colorado-based Medicine Man Technologies, which does business as Schwazze.
At the close of the third quarter last year, 4Front had lost a cumulative $29.7 million; while Schwazze hasn’t even filed its third quarter financials due to a need to restate several preceding results. However, Schwazze lost $2.7 million in the second quarter of last year and was carrying $163.4 million in debts.
A third public cannabis company, California-based Gold Flora Corp., recently put itself up for sale and went into receivership. Gold Flora has not yet filed its fourth quarter financials either.
The only two public cannabis companies to post a profit in 2024 were Illinois-based Green Thumb Industries and California-based Glass House Brands, which reported net incomes of $73.1 million and $721,000, respectively.
The other 16 companies each lost at least seven figures last year.
The biggest swath of red ink in the group was sustained by Florida-based Ayr Wellness, which posted a $362.3 million net loss.
Other nine-figure losses in 2024 by public cannabis companies include:
$341.8 million lost by Chicago-based Verano Holdings Corp.$334 million lost by Smith Falls, Ontario-based Canopy Growth Corp., which is the owner of Denver-based Canopy Growth USA and has a portfolio that includes Acreage Holdings, Jetty and Wana Brands$205.7 million lost by the Chelmsford, Mass.-based Cannabist Company Holdings$222 million lost by Stamford, Conn.-based Curaleaf Holdings$155 million lost by Tallahassee, Fla.-based Trulieve Cannabis Corps
The smallest loss, by contrast, was from New York City-based iAnthus Capital Holdings, which lost $7.6 million.
Canopy Growth Corp. was added to the annual analysis this year after its acquisition of Acreage Holdings closed in December. Following that close, Acreage’s shares were delisted from public stock exchanges, while Canopy’s are traded on the Nasdaq.
The only company to have reported solid net income in all three years has been Chicago-based Green Thumb Industries, while a few others have fluctuated between negative and positive territory. Green Thumb, by contrast, reported net income of $12 million in 2022, followed by $36.3 million in 2023, and then $73.1 million in 2024.
No other public cannabis company has a record anywhere close; most of them, by contrast, have lost tens if not hundreds of millions of dollars. New York City-based multistate operator Ascend Wellness Inc., for instance, reported a net loss of $84.9 million for last year.
Delayed legalization takes its toll
Karnes also said that ever-delayed federal marijuana reform has become an albatross for the industry, because many companies invested heavily years ago in the expectation that cannabis would be federally legalized by now, which hasn’t happened.
Morgan Paxhia, managing director at Poseidon Investment Management, added that many leading public cannabis companies’ balance sheets are weighed down by hefty loans they took out around five years ago to build out both production and retail infrastructure.
But because marijuana hasn’t been legalized — leaving 280E still in full effect — those debts led to multiple years of enormous losses, Paxhia said.
“There was a pretty strong credit wave that came in really post-pandemic where there was a lot of money available to credit and there was a lot of credit that was put out as a result. It was very easy to raise debt, and so companies would, because you couldn’t raise equity, but these debt groups were throwing cash at you,” Paxhia recalled. “A lot of these companies took on debt thinking that their businesses were going to grow, but then they didn’t.”
That created a “debt spiral” for many of the public cannabis businesses, Paxhia said, and some — such as California-based Gold Flora — have gone under as a result.
Paxhia said he expects others are not far behind.
“There’s a lot of public companies that are heading in a bad direction and most of ’em are not going to make it through without pretty severe actions,” Paxhia said.
Many of the public marijuana companies have also reported shrinking revenue growth over the past year, Paxhia added, another sign that the sector is in serious distress.
“In 2023, overall, the public companies were still growing up on average about 5%. And then in 2024, that number dropped to 1%. So growth has been slow to negative,” Paxhia said. “Early projections (for 2025) we’re looking at, some of these companies will continue to shrink. So as they shrink and their debt loads don’t shrink, it just puts them in a very precarious situation.”
The cost of prohibition
There are other factors at play too, Paxhia and Karnes said, including the rise over the past few years of intoxicating hemp goods that are posing a direct threat to legal marijuana company market share. Paxhia said those companies are sucking “billions” of revenue away from state-legal marijuana shops, which could obviously make an enormous difference to publicly traded cannabis businesses if those competitors were quashed.
“It’s really important because it does tie into this where it’s shifted billions of dollars of revenue from these state legal markets, and that’s top line growth that they did not get that they were planning to capture,” Paxhia said.
Karnes added that there’s also the ever-present “cannabis premium” for anyone in the marijuana trade, referring to a generally inflated cost of average services due to the federal illegality of marijuana.
“For cannabis companies, there are these other added costs of prohibition that makes it extremely difficult to achieve profitability,” Karnes said. “That’s like the compliance costs, legal fees, accounting fees, insurance costs, cost of capital, that’s all out of the ordinary compared to other industries, so that also contributes to some of the challenges.”
Whether any of those burdens will be lightened under President Donald Trump’s administration is yet unclear. The federal marijuana rescheduling process — which began under President Joe Biden, and which would nullify 280E if it’s ever completed — is currently at a standstill with the Drug Enforcement Administration, and the political climate in Washington, D.C. doesn’t appear to be prioritizing cannabis reform, Paxhia said.
