Business
Marijuana multistate operators see sluggish revenue, losses in first quarter
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/
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
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.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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