Viridian Chart Of The Week: Is Consolidation Increasing In Cannabis?
Viridian noted in a Chart of the Week published in November 2022 that increased “consolidation is inevitable” in the Cannabis industry. What does the latest data show?
The green bars in the graph show data from BDSA that Viridian presented at the Green Market Finance Summit at NECANN on March 22. The orange line is an alternate calculation based on company financial statements. Although both data sets show a higher concentration level in 2023 than 2020, the recent direction differs. Which one is correct, and what is the likely future direction?
The BDSA data shows the share of sales by the top 20 brand houses each year. Note that the top 20 may be different each year. BDSA aggregated all retail sales of the brands associated with a brand house. For example, all of the retail sales by Green Thumb brands are added, whether GTI makes the retail sale at one of its dispensaries or someone else sells the product purchased from Green Thumbs on the wholesale market. This approach puts everything on a retail basis.
The financial statement calculation is more straightforward: aggregating the highest twenty company revenues each year divided by the Statista total retail sales number. This approach, however, is biased downward for two reasons. The total revenue for each company is a combination of retail and wholesale revenue, …