The BeLeaf Buzz: December 2024
Originally sent to subscribers in December 2024. View the original email.
Welcome to The BeLeaf Buzz
Welcome to the fourth issue of The BeLeaf Buzz, presented by BeLeaf Medical — your monthly source for cannabis industry insights, local stories, and company highlights. Stay connected as we present upcoming events, introduce our team, and share curated news relevant to our business.
As 2024 comes to a close, BeLeaf takes pride in reflecting on a year marked by growth, adaptability, and notable achievements. We extend our heartfelt gratitude to our investors for your trust and support. Looking ahead, we are eager to build on this year’s progress and remain optimistic about the opportunities and successes that await in the new year.
From all of us at BeLeaf Medical, we wish you a joyous holiday season and a prosperous New Year!
Buzz-Worthy BeLeaf News
November 5-7, 2024 — BeLeaf Leadership at MJ Unpacked
BeLeaf’s leadership recently attended MJ Unpacked in St. Louis, where several team members participated in key panel discussions. Mitch Meyers, Founder and Board Member, joined industry experts to discuss the importance of ensuring product quality in dispensaries. The conversation emphasized the need for dispensaries to “trust but verify” the safety of their products. Additionally, Jack Haddox, Director of Retail Operations, participated in a panel exploring the challenges of heavy retail discounting and shared strategies for maintaining profit margins while keeping customers satisfied.
December 15, 2024 — SWADE Cannabis Hosts Voodoo Christmas
A first-of-its-kind “Cannabis-Friendly Winter Market for Adults” is coming to St. Louis on Sunday, Dec. 15, at 4 Hands Brewing Co. The market will feature live music from Sean Canan’s Voodoo Players, holiday shopping from local vendors, and designated consumption areas. Read More →
Buzzing with Innovation
As part of BeLeaf’s ongoing commitment to innovation and operational efficiency, we made some key investments in state-of-the-art equipment throughout 2024. These upgrades are enhancing our manufacturing capabilities and positioning us for continued growth. For instance, in September, we introduced the Xylem Robotic Vape Filling Machine, the first of its kind in Missouri, capable of filling up to 1,600 units per hour. More recently, we installed the RollPros V2 Automatic Pre-Roll Machine at our Cherokee facility, doubling our production capacity! Here’s a closer look at some of the other exciting additions from this year:
Top: THCa Isolator – The first and only peer-reviewed in-line separator on the market, representing a major innovation in our extraction process.
Middle: Beaker & Wrench Wiped Film Evaporator – A vital component of our distillation process, designed to enhance both efficiency and product quality.
Bottom: Beaker & Wrench 40L Decarb Reactor – A crucial tool in removing volatiles and converting THCa to THC, ensuring seamless separation in the next stage of distillation.
Industry News
November 11, 2024 — Missouri’s $1.4B Cannabis Market Surges Ahead
Missouri’s cannabis market is outpacing states like AZ, CO, and NV, with rapid growth reshaping the industry and drawing national attention. Read More →
December 2, 2024 — Updates: DEA Cannabis Rescheduling Hearing
The first step in the U.S.’s landmark effort to reschedule cannabis officially took place on Dec. 2, with historic hearings set to begin in January 2025. Read More →
November 12, 2024 — Stacking Up the Savings: A Win for MO MJ Business
Good news could be on the horizon! A recent Appeals Court ruling states that counties cannot stack marijuana taxes in Missouri. While the case heads to the Supreme Court, BeLeaf is proactively working with The Brennan Group to ensure we’re ready. We’ve filed MO Form 126 (dated back to 08/24/2022 when stacking of taxes was initiated) to establish priority status should refunds be issued. Stay tuned as we track this exciting development. Read More →
U.S. Drug Enforcement Administration Chief Administrative Law Judge John Mulrooney II hears from attorney Matt Zorn during marijuana rescheduling hearing on December 2, 2024. (Image courtesy of dea.gov/live)
More Stories:
- Recent Missouri Market Overview Presentation from MJ Unpacked
- Missouri’s Cannabis Market Remains Consistent Through Oct. 2024
- Federal Policy Could Add $3 Billion to Cannabis Industry
Team Spotlight: Welcoming Rolla to the SWADE Family!
We’re excited to announce the recent acquisition of the Good Day Farm dispensary in Rolla, marking a significant step in SWADE Cannabis’ expansion outside of St. Louis. This new milestone allows us to bring the SWADE experience to even more communities across Missouri. As part of the transition, we’re proud to welcome the talented employees from the Rolla location into the SWADE family. With their expertise and passion, we’re eager to continue delivering exceptional service and products to our growing customer base.
Cannabis 101
What is Price Compression? Price compression occurs when cannabis product prices decrease due to market forces like increased competition, higher supply, or greater production efficiency. This trend is common as cannabis markets mature, as seen in states like CO, CA and OR where prices were initially high and have since stabilized.
Why Does Price Compression Happen?
- Market Maturation: Initial high demand and limited supply drive up prices in new markets. As competition grows and supply expands, prices stabilize. For example, Missouri saw a 15% price increase after legalizing adult-use sales in Feb 2023, followed by stabilization.
- Increased Competition: More dispensaries and brands enter the market, creating price wars to attract customers. Missouri has more than 200 dispensaries, intensifying competition.
- Economies of Scale: Larger producers lower costs through operational efficiency, passing savings to customers.
- Consumer Trends: Buyers become more price-sensitive over time, encouraging discounts and competitive pricing.
Missouri’s Current Price Landscape: Missouri’s cannabis market has shown resilience despite price compression. Total sales surpassed $3.1B by October 2024. While prices have declined since initial adult-use sales began, Missouri’s average item price remains higher than in mature markets like Oregon and Washington, with discounts averaging 13.7% compared to 15%+ in other states. (Headset).
BeLeaf’s Strategic Approach & Outlook: To navigate price compression, BeLeaf is scaling production to meet growing demand, focusing on quality to differentiate from competitors, and driving operational efficiency to maintain higher profitability margins.
Despite price compression, BeLeaf’s 2025 forecast remains strong, with Net Revenue expected to be near 2024 levels. In 2024, Gross Revenue reached $62.1M, with Net Sales at $56.2M after $5.9M (9.5%) in discounts. For 2025, Gross Revenue is projected to grow by $5.2M but estimated higher discounts driven by increased volume and competition will offset this, resulting in projected Net Sales of $55.9M—a modest $200K year-over-year decline. At an average unit sales value of $23.60 (Swade YTD November average), this represents a sales volume increase of over 220K units in 2025, supported by a forecasted market share rise to 4.73% by November 2025.
Upcoming Industry & Sponsored Events
- Dec 15: Voodoo Christmas Market
- April 2025: BeLeaf Investor Event – Details and exact date to be announced. Stay tuned for further updates.
For assistance or any inquiries, please feel free to contact Joey Pintozzi at Joey.Pintozzi@beleafco.com.