Curaleaf CEO: Federal excise tax could come to U.S. pot industry in 2019
The U.S. government may not be able to resist a steady flow of revenue from cannabis sales for much longer, according to the chief executive officer of one of the nation’s largest pot retailers.
“I think you could see a resolution between the conflict of federal and state laws in 2019 and that may be part of the conversation – some sort of federal excise tax,” Curaleaf Holdings Inc. CEO Joe Lusardi told BNN Bloomberg in an interview on Tuesday.
“It’s tax [revenue for] the state and it’s proven to be a big economic engine. Colorado generated hundreds of millions in tax revenue off cannabis. That’s significant dollars that they didn’t have in the state coffers before they enacted an adult-use program,” he said.
Curaleaf, which is the largest single-brand cannabis retailer in the U.S. with 38 dispensaries, believes that two markets in which it already has a significant presence — Florida and New York — will prove crucial to deepening the push towards recreational legalization on a federal level.
“There’s 20 million people in New York, so the prospect of that market obviously excites us,” Lusardi said. “We’ve got an established footprint there, so that’s very promising.”
“I suspect that [in] Florida, you’ll see a recreational vote in 2020,” he added. “But, even on a medical basis, those markets show incredible promise. Florida added over 140,000 patients – medical patients alone – in 2018.”
Curaleaf raised over $400 million in a Canadian Securities Exchange-record reverse takeover last October. However, the stock has slid from its early-November high of $11.49 and was trading at $7.49 as of 11:35 a.m. ET Tuesday.
Lusardi was unfazed by the stock drop, chalking it up to an industry-wide selloff, and said the company already has plans for how to use the money it raised.
“We took on a bunch of money and we’ll deploy that into the markets,” he said of the reverse takeover, noting that the company received investment from over 100 institutions worldwide.
“We intend to do a significant amount of M&A this year,” he added.
All this adds to the optimism Lusardi expressed for the future of the U.S. market.
“We think that the political winds are at our back at the moment,” he said. “We think there’s going to be a lot of improvements in 2019, and hopefully at the federal level as well.”