Columbia Care Announces Cost-Cutting Measures and Sale of Florida Business

Cannabist Co. Holdings Inc., the parent company of dispensary operator Columbia Care, announced on Monday plans to reduce its workforce and divest holdings in Florida as part of a strategy to save $10 million annually. The exact number of job cuts has not yet been determined.

Focus on Profitable Markets

As part of this cost-saving initiative, Cannabist will also divest assets in other underperforming markets over the coming months. The company intends to focus its efforts on more profitable markets such as Virginia and New Jersey. Additionally, Columbia Care is preparing to participate in the launch of recreational marijuana markets in Ohio and Delaware.

Competitive Florida Market

The decision to exit Florida comes amid stiff competition from larger players such as Trulieve Cannabis Corp., Curaleaf Holdings Inc., and Green Thumb Industries. Florida is also gearing up for a referendum vote on adult-use marijuana in November, adding further uncertainty to the market.

Leadership and Market Challenges

In January, Cannabist promoted its operating chief, David Hart, to chief executive. The company had previously agreed to be acquired by Cresco Labs Inc. in 2022, but the deal was called off in June of last year. Cannabist’s stock has plummeted by 60% in 2024, contrasting with a 0.3% drop by the AdvisorShares Pure U.S. Cannabis ETF.

Verano’s Stock Buyback Program

In related industry news, Verano Holdings Corp. announced its first-ever stock buyback program, planning to repurchase $50 million of its own shares. This move aims to strengthen Verano’s balance sheet and support long-term growth through various capital deployment strategies, including capital expenditures and potential mergers and acquisitions.

Cannabist’s announcement reflects ongoing challenges and strategic adjustments within the cannabis industry. As the company sheds workers and divests assets, it aims to streamline operations and enhance profitability in its core markets. The industry will be closely watching how these measures impact Cannabist’s performance and broader market dynamics.