Trulieve, the biggest cannabis vendor in the U.S., has decided to cease operations in Massachusetts and downsize its business interests in California, two markets that have experienced significant pricing pressure over the past twelve months.
Headquartered in Florida and currently operating 187 dispensaries across the country—the largest number in the industry—declared on June 1 that it intends to halt its comprehensive operations in Massachusetts. This includes discontinuation of its three retail stores located in Framingham, Northampton, and Worcester by the end of June, as well as its cultivation and processing plant in Holyoke by the close of the year.
Last year, the Holyoke site received national attention after a 27-year-old employee named Lorna McMurrey collapsed and subsequently died on-site, an incident that was subsequently investigated by the Occupational Safety and Health Administration.
Moreover, Trulieve will shutter its dispensary in Grover Beach, California. This decision follows the company’s departure from certain retail outlets in Palm Springs and Venice, California, last year.
These closures align with what Trulieve has previously characterized as preemptive measures initiated in mid-2022 to “optimize cash and reduce margin dilutive assets,” streamline operations, and reallocate resources to promising markets with sustainable growth potential.
Most recently, Trulieve launched two medical cannabis dispensaries in Georgia in late April. The company also plans to open its first medical cannabis dispensary near Columbus, Ohio, later this year. However, Trulieve’s primary footprint comprises 125 dispensaries in Florida, where it has donated $38.5 million towards supporting a 2024 adult-use ballot initiative.
In its Q1 financial report published last month, Trulieve disclosed a cash balance of $195 million at the end of the period. Nevertheless, the company’s latest optimization initiatives follow its departure from the Nevada wholesale market and its decision to limit production capacity in several states to match consumer demand.
“These challenging but necessary actions are part of a broader strategy to strengthen business durability and underscore our commitment to cash conservation while focusing on deepening our presence in key markets and discarding non-productive assets,” CEO Kim Rivers mentioned in a press statement. “We remain optimistic about our strategic position and the industry’s long-term potential.”
About 95% of Trulieve’s revenue comes from retail sales, which factored into their strategic decisions following a 7% drop in California’s adult-use market in 2022, with revenues continuing to plummet in Q1 2023.
In Massachusetts, the retail sales growth rate dropped to 7% in 2022 after experiencing 69% and 76% growth in the preceding two years, largely due to an increase in supply and drop in prices which led to profitability challenges for many operators. As of April, the average price of flower at adult-use retail was $171.60 per ounce, reflecting a 57% decrease since early 2021, as per the Massachusetts Cannabis Control Commission.
Specifically for Trulieve, the company’s exit from the Massachusetts market will affect 128 employees, as reported by MassLive.com .
Though Trulieve announced in their press release that they expect to completely exit Massachusetts operations by 2023 end, a letter addressed to a dismissed employee from the Holyoke facility acquired by Cultivated reporter Jeremey Berke implies that the facility will close on July 31.
“We regret to inform you that your role will be terminated and your employment with Trulieve will end on July 31, 2023,” the letter states. It was signed by Nichelle Miller, Director of People Operations at Trulieve.
As per the letter, employees of the Holyoke facility will be considered inactive starting July 1, but will continue to receive their salaries and benefits until the end of July.
As Trulieve assesses the performance of its operations across different state markets, the company will implement further measures to optimize the business as necessary, according to the June 1 press release.
“The company is committed to cash preservation and cash generation while making strategic investments in retail expansion and sophisticated data and technology platforms to lay the groundwork for a future characterized by integrated commerce,” the press release stated.
RELATED: Trulieve to Launch Georgia’s First Medical Cannabis Dispensary
