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Marijuana multistate operators see sluggish revenue, losses in first quarter

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Most of the largest U.S. marijuana multistate operators experienced revenue declines in the first quarter of 2022 versus the previous three months, reflecting seasonal factors, declining cannabis prices and inflationary pressures that could be curbing consumer spending.

Of the 12 largest MSOs, only Illinois-based Green Thumb Industries posted a net profit for the first three months of 2022.

Florida-headquartered Trulieve Cannabis, meanwhile, inched ahead of Curaleaf Holdings for the top spot in revenue.

But, based on revenue guidance, Massachusetts-based Curaleaf likely will reclaim the top position, perhaps as soon as second-quarter results are announced.

In a metric closely watched by investment analysts, half of the 16 largest marijuana MSOs beat EBITDA (earnings before interest, tax, depreciation and amortization) estimates, while half missed their projections – about what one would expect in a given quarter, according to Frank Colombo, director of data analytics at New York-based Viridian Capital Advisors.

“What is striking is how little correlation there is between missing EBITDA estimates and how the stock did,” Colombo told MJBizDaily via email.

In fact, the company that outperformed EBITDA estimates the most on a percentage basis – Nevada-based Planet 13 Holdings – had the worst relative stock performance, according to Viridian.

“Meanwhile, the company that missed estimates by the most was TerrAscend (with offices in New York and Toronto), but the stock slightly outperformed the market,” Colombo wrote.

“Our conclusion is basically that investors shrugged off the quarter’s numbers.”

Marijuana stock prices have been battered in the past 18 months, largely because of the lack of progress by Congress in reforming the nation’s marijuana laws.

Colombo wrote that cannabis stock investors also are now considering the following factors:

  • How well is a company positioned to take advantage of the emerging recreational marijuana markets in New Jersey and New York?
  • Is a company a potential takeover candidate?
  • How is the company’s liquidity situation? Will it need to raise money in what has become an unfavorable economic market to do so?

In addition, Colombo wrote, “it will be interesting to see if inflation and/or a weakening economy start to have an impact on margins.”

A new No. 1

Trulieve Cannabis captured the top spot in revenue on the strength of a 4% quarter-over-quarter increase, while Curaleaf’s revenues slipped 2% for the same period.

MSOs typically enjoy a strong bump in sales during the December holiday period, followed by weaker sales after the first of the year.

In 2022, marijuana companies also are facing such revenue-squeezing factors as declining prices.

Yet, the larger economy is experiencing inflation that affects the amount of money consumers have to spend on discretionary products such as cannabis.

Trulieve is the market leader in Florida’s billion-dollar-plus medical marijuana industry and has market-leading retail positions in Arizona and Pennsylvania, according to company regulatory filings.

But Trulieve doesn’t have a presence at this point in New York or New Jersey and is seeing more competition in Florida, where it once commanded roughly half the market share.

Trulieve still has nearly 50% of retail flower sales in Florida, according to the state’s May 27 weekly update, but its share of sales of other THC products has fallen to roughly 40%.

Pablo Zuanic, investment analyst at New York-based financial services firm Cantor Fitzgerald, estimated in a recent research note that Arizona, Florida and Pennsylvania combined account for roughly 94% of Trulieve’s sales in the first quarter. Of those three, only Arizona has an adult-use market.

Zuanic noted that Trulieve management reaffirmed full-year sales guidance at $1.3 billion to $1.4 billion, but he said the high end of that estimate “may be a stretch in the current environment,” especially if medical marijuana sales in Pennsylvania are adversely affected by residents crossing the border to buy recreational products in New Jersey.

He also noted that there’s “no clear signs its core markets (such as Pennsylvania) will go rec in 2022 or even 2023.”

But Zuanic does believe that Trulieve is “likely to remain opportunistic” in terms of potential mergers and acquisitions to add depth and/or breadth to its footprint.

Curaleaf, meanwhile, is well-positioned to take advantage of new East Coast recreational marijuana markets, with operations in Connecticut, New Jersey and New York.

Executive Chair Boris Jordan told MarketWatch last month that despite a tough first quarter, the company still is on track to generate $1.4 billion to $1.5 billion in revenue this year.

In a news release, Jordan said the company experienced strong month-over-month sales in March.

Curaleaf likely will reclaim the top-revenue spot from Trulieve, according to its revenue guidance and Jordan’s comments.

The company is expected to benefit from the recent launch of the New Jersey recreational marijuana market, a growing share of Florida’s MMJ market as well as cultivation and retail expansion in other key states.

Vivien Azer, an investment analyst with New York-based investment banking firm Cowen, had a similar take on Curaleaf after it posted its first-quarter results last month.

“Despite deflationary/consumer headwinds, margins (and revenues) should expand sequentially from here,” she wrote in a note to investors.

In this case, deflation refers to marijuana price reductions.

Eye on Cresco

Illinois-headquartered Cresco Labs is another company that investment analysts are watching closely, because it is in the process of acquiring New York-based Columbia Care for roughly $2 billion.

That acquisition likely will catapult Cresco into the company of Trulieve and Curaleaf, depending on how many assets are sold as part of the Columbia Care transaction.

Columbia Care’s 12% quarter-over-quarter revenue decline was the most among the 12 largest MSO operators.

Cresco has issued guidance for “muted growth” for the second quarter of this year, according to a recent investment note by Cantor Fitzgerald’s Zuanic.

But if and when it closes on the Columbia Care transaction, Cresco will be in eight new states, including New Jersey and Virginia.

The company also is expected to have the top or No. 2 spot in the Colorado, Illinois, Massachusetts, Pennsylvania and Virginia markets.

In addition, Cresco will have a strong foothold in New York.

But Zuanic also warned of possible investment risks: the integration of the Columbia Care acquisition, subpar growth trends and stiffer competition in key states such as Illinois and Pennsylvania.

Jeff Smith can be reached at jeff.smith@mjbizdaily.com.

Source: https://mjbizdaily.com/marijuana-multistate-operators-see-sluggish-revenue-losses-in-first-quarter/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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