Not DC, But The States: Tim Seymour Discusses How Red States Could Catalyze Cannabis Growth

Tim Seymour, portfolio manager of the $CNBS Amplify Seymour Cannabis ETF (NYSE: CNBS), is a key voice in the cannabis investment community.

With an insightful understanding of market dynamics, Seymour recently shared his views with Benzinga Cannabis on what truly drives growth in the cannabis industry, emphasizing the significance of state-level legalization over federal rescheduling.

The Real Catalysts: State-Level Legalization

According to Seymour while federal rescheduling of cannabis is a monumental step towards normalization, it is not the primary catalyst for industry growth.

"The real economy in the cannabis sector is driven by businesses that are actively selling products to a growing consumer base, not just by top-down legislative changes," Seymour explained.

He argued that incremental legalization in states like Pennsylvania and Florida is more impactful, providing a direct boost to the market by expanding consumer access and legal sales frameworks.

Impact Of Rescheduling: A Relative Perspective

While acknowledging the historic nature of federal rescheduling, Seymour relativizes its immediate impact on the industry.

"Rescheduling is significant, but its effect is more gradual and less direct than the day-to-day operations and expansions happening at the state level." 

Seymour suggested that investors should focus more on the dynamics of state markets, where real growth is observable and measurable.

Regional Market Insights: Ohio, Florida, Pennsylvania

• Ohio's cannabis market is on the brink of a significant transformation with the expected transition to adult-use recreational sales. According to projections, the market could quadruple to a total size of $2.3 billion shortly after legalization, based on an estimated $200 per capita spend. 
• Florida's cannabis market is projected to grow substantially, with legal cannabis spending expected to increase at a 12% CAGR from 2023 to 2028. If adult-use marijuana is legalized under Amendment 3, sales could surge, reaching $4.5 billion by 2028, making Florida the second-largest U.S. cannabis market. This potential legalization could also generate an additional $874 million in sales in 2025 alone.
• Pennsylvania’s medical cannabis market is also poised for substantial growth, with sales expected to nearly double to between $400 million and $500 million this year and potentially reach $1 billion within three to four years. The state is also increasingly viewed as a market ready to legalize recreational marijuana. 

• Related news: GOP, Dems Join Forces On Pennsylvania Marijuana Bill: Why Let Neighboring Ohio Get 'Lion's Share' Of Cannabis Dollars?

Strategic Positions 

Cresco Labs CRLBF is strategically positioned in Ohio and

ready to capitalize on the imminent launch of its recreational cannabis market. In Florida, where it is strengthening its market presence alongside Trulieve TCNNF in preparation for adult-use legalization. Jushi Holdings JUSHF stands out as another multi-state cannabis company with significant market cap upside potential, particularly in Pennsylvania according to senior analyst Pablo Zuanic. 

Future Projections: Red States And Market Expansion

Looking ahead, Seymour is optimistic about the potential for cannabis legalization across traditionally conservative red states, viewing it as inevitable and crucial for broad industry expansion.

"As more states come online, particularly red states, we’ll see a substantial transformation in the industry landscape, driving growth from the ground up. States legalizing adult-use cannabis are the key drivers transforming the industry, not Washington. The significant progress at the state level in the past five years is more impactful than federal actions and red states are starting to support reforms that matter to their voters,” Seymour said.

“The significant progress at the state level in the past five years is more impactful than federal actions. Investors should focus on companies well-positioned in important markets and capable of adapting their business strategies effectively. For investors, understanding margin profiles is crucial for building a portfolio that will attract institutional investors." 

Seymour added that the real drivers of cannabis industry growth are the state-level legalizations that bring products to consumers’ hands.

These investing issues will be a hot topic at the upcoming Benzinga Cannabis Capital Conference in Chicago this Oct. 8-9. Join us to get more insight into what the wave of weed legalization means for the future of investing in the industry. Hear directly from top executives, investors, advocates and policymakers. Get your tickets now before prices go up by following this link.

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