It’s cannabis company earnings season once again, which offers investors an opportunity to hear from senior company leadership during earnings calls.
Here are the major cannabis sector trends that emerged from the calls.
6 Major Cannabis Sector Trends That Emerged in Earnings Calls
1. Cannabis Demand Remains Strong
Despite the decline in consumer confidence, demand for THC products is at an all-time high, said Green Thumb (GTBIF) CEO Ben Kovler in his first-quarter earnings call.
Cannabis products continue to take share from alcohol, explained Green Thumb president Anthony Georgiadis in the call. “We’ve long believed the demand for cannabis products would accelerate, and we’re now seeing real evidence of that shift,” he said.
“With new product formats like THC beverages gaining traction, especially in traditionally conservative regions, we’re increasingly bullish on long-term category growth. The tidal wave of demand that Ben has been talking about since the day I met him is big and getting bigger by the day.”
Trulieve (TCNNF) reported that retail traffic and units sold increased by 7% year over year in the first quarter, “indicating strong demand for cannabis products.”
2. Federal Reform May Remain Elusive
Green Thumb CEO Kovler remains skeptical that federal reform, like rescheduling, will happen soon.
“From what I can see, that change is not on the agenda for the Trump administration,” he said in the first quarter earnings call. “The DEA has historically not been friendly to cannabis, and the nominee to head up the agency, Terry Cole, was pretty cagey about rescheduling at his recent congressional hearing.”
“As we look ahead, our expectations on regulatory reform remain grounded in reality,” said Green Thumb president Georgiadis. “We said before that we don’t expect sweeping federal reform anytime soon, and nothing we’ve seen recently has changed that view. We all listened to the same DEA hearing you did, and we remain confused by the industry’s false sense of optimism.”
But Kovler threw a bone to optimists. “Of course, there is always a chance for change, and this administration probably increases the odds of a left-field event,” he said.
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3. Cannabis Drinks Are Increasingly Popular
“Alcohol consumption is declining, especially among younger adult consumers. And this gives us a long runway for future engagement as THC drinks gain momentum,” said Green Thumb CEO Kovler in his company’s earnings call.
“The THC beverage category is in its early stages of mainstream popularity, and we are bullish on its opportunity as a legal product and are encouraged by both the data on the ground and our position in the space,” he said.
“We plan to expand into every state that supports compliant hemp commerce,” said Curaleaf CEO Boris Jordan in his company’s earnings call.
Hemp-based THC drinks are legal under federal law, though several states are moving to crack down on sales.
4. More State-Level Legalization May Happen Soon
Trulieve said it is optimistic about recreational-use legalization in Florida and Pennsylvania, given the strong public support and recent legislative developments.
Heavily backed by Trulieve, the Smart & Safe Florida campaign in Florida is collecting signatures to get a recreational-use legalization measure on the ballot again in 2026. The measure got voted down last year, but the vote was close.
“To date, the campaign has collected over 700,000 signatures, which once validated, is sufficient to trigger a review by the Florida Supreme Court. With 23 million residents and 143 million tourist visits per year, Florida has the potential to be the best legal cannabis market,” said Trulieve CEO Kim Rivers in the earnings call.
Turning to Pennsylvania, “support for adult-use legalization continues to build momentum as most neighboring states have launched adult-use programs,” she said. “We remain optimistic that adult-use legalization can happen in the near term.”
5. Pricing Pressure Persists
“Supply-demand imbalances, new competition, unregulated products being sold as hemp and the consumer who’s watching their wallet are all contributing factors,” said Green Thumb president Georgiadis. “We have tools to manage this, operational efficiency, brand strength and scale among them, but we also recognize these tools have limits.”
Green Thumb reported scant 1% first-quarter year-over-year sales growth. Sales were down 3% sequentially. Same-store sales (at stores open a year or more) dropped 5%.
Curaleaf saw a 6% sequential decline in sales, in part due to price compression. “Price compression remains a significant headwind across the industry and will likely persist, especially in the face of a turbulent macroeconomic backdrop,” said Curaleaf CFO Ed Kremer. In an interview after the earnings call, Jordan said his company saw 13.5% year-over-year price compression across all markets.
“The promotional environment in Florida remains competitive, with some competitors continuing to engage in aggressive pricing and broad-based discounts,” said Rivers, at Trulieve. “Since the start of the year, we have observed moderate shifts in consumer behavior towards value-oriented products.”
Verano (VRNOF) reported a 5% decline in first quarter sales compared to the year before, in part due to price compression, discount activity and increased competition in key markets.
6. International Growth Remains Impressive
At Curaleaf, international sales advanced 74% to $35 million in the first quarter. That was the fourth consecutive quarter of 70% plus growth. Growth was solid in Germany and the U.K.
Curaleaf expects international sales to grow to $170 million this year, from $107 million last year. “Both the U.K. and Germany are still very much underpenetrated and have a lot more room to continue growth,” he said.
“Germany represents a significant growth opportunity, with approximately 10% of the population self-reporting cannabis use and only 0.5% registered as medical cannabis patients,” agreed Organigram (OGI) CEO Beena Goldenberg.
Jordan expects solid growth to continue as more countries legalize sales. “We are encouraged by prospects for new market openings that could materialize over the next year,” he said. Jordan would not name countries that are about to legalize.
On the downside, product from Colombia, Africa and Canada is arriving in Europe, and it may lead to price compression there, too. “There’s a tremendous amount of cannabis that can’t be sold in Canada or other markets. It’s now making its way into the European market,” said Jordan.
For more key cannabis sector trends that came out of recent earnings calls, and the best names to own as plays on these trends, consider subscribing to Cabot Cannabis Investor here.
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