The legal marijuana industry is growing by leaps and bounds, but this growth isn't simply confined to Canada. Even though the U.S. federal government has thus far been unwavering on its classification of cannabis as a Schedule I (i.e., illicit) substance, the legalization of medical marijuana in 33 states, along with 10 U.S. states giving the green light for adult consumption, has led to a rapid rise in sales. At this point, federal legalization isn't a necessity for marijuana stock investors focusing on the United States to make money.

There's perhaps no niche where growth has been more robust for publicly traded pot stocks than among vertically integrated marijuana dispensary stocks. There are currently 10 prominent publicly traded dispensary stocks, eight of which have operations in multiple states.

To be frank, this is a fast-paced and somewhat confusing subcategory of the U.S. cannabis industry. As such, it deserves a much closer look. Consider this your 411 on the biggest and most important names in the U.S. marijuana dispensary space.

A large dispensary sign with a huge cannabis leaf and the word dispensary underneath it.

Image source: Getty Images.

Which vertically integrated dispensaries have the most stores open right now?

Almost every vertically integrated dispensary -- i.e., a dispensary that completely controls its supply chain, including cultivation and processing -- proclaims themselves to be the nation's largest or best. But let's take a look at the current data (via press releases or even counting retail locations on their websites) as of April 5, 2019 to determine which of the 10 largest dispensaries has the greatest number of open retail locations.

If the checkered flag were to wave right now, Curaleaf would have the nation's largest presence with 43 open locations, 23 of which are in Florida's booming medical marijuana market. Upscale dispensary MedMen would be second with 32 locations, Harvest Health third with 30, and Trulieve Cannabis fourth with 27. It's worth noting that Trulieve has 26 of its 27 currently open locations in the Sunshine State, too.

Meanwhile, at the bottom of the list, Planet 13 Holdings is more of a superstore retail model in the Las Vegas area, while recent acquisitions by Cresco Labs should really boost its physical presence.

Two miniature shopping carts. The one on the left contains a cannabis flower, while the right one contains alternative cannabis products.

Image source: Getty Images.

Which vertically integrated dispensary has the highest number of future retail licenses?

With rapid expansion underway, the next big question you might be wondering about is what the eventual upper boundary is for these dispensaries in terms of retail locations. Not all of these stocks are forthcoming with that figure, but here's what we do know:

  • Harvest Health & Recreation: 123 retail licenses (pro forma)
  • MedMen Enterprises: 78 retail licenses (pro forma)
  • Green Thumb Industries: 72 retail licenses
  • iAnthus Capital Holdings: 63 retail licenses
  • Cresco Labs: 51 retail licenses (pro forma)

If you're wondering what this "pro forma" business is, it's simply referring to the outlook for these companies if (big "if") their current acquisitions receive approval from shareholders and regulators.

For example, MedMen is currently in the process of acquiring privately held PharmaCann for $682 million in an all-stock deal. Assuming approval of the deal, the number of cultivation and processing facilities the company is operating will rise, and it'll also acquire existing retail stores, as well as retail licenses that have yet to be utilized. Altogether, the company expects to hold licenses for 78 stores when the deal closes.

Similarly, Cresco Labs recently announced a $120 million cash-and-stock deal to acquire VidaCann. The medical marijuana operations license held by VidaCann in Florida will allow Cresco to operate up to 30 retail dispensaries in the state.

We also saw iAnthus close on its acquisition MPX Bioceutical on February 5, 2019. The deal increased the company's peak retail-store license count to beyond five dozen.

A black silhouette of the United States, partially filled in by cannabis baggies, rolled joints, and a scale.

Image source: Getty Images.

Which U.S.-focused dispensary is the most multistate?

Taking pro forma projections and future expansion opportunities into account, you might be wondering which of these U.S. dispensaries will truly be operating in multiple states. Here are the number of states these dispensaries expect to be operating in.

  • Acreage Holdings: 19 states
  • Harvest Health & Recreation: 16 states
  • MedMen Enterprises: 12 states
  • Curaleaf Holdings: 12 states
  • Green Thumb Industries: 12 states
  • iAnthus Capital Holdings: 11 states
  • Cresco Labs: 11 states
  • Trulieve Cannabis: 3 states
  • Liberty Health Sciences: 1 state
  • Planet 13 Holdings: 1 state

In terms of geographic diversity, Acreage Holdings takes the cake at 19 states, followed very closely by Harvest Health, which is the midst of a large acquisition of privately held Verano. Although most vertically integrated dispensaries look pretty well diversified based on this data, many have a majority of their retail locations in a small number of states.

For example, MedMen has 78 licenses spanning a dozen states, but 30 of those licenses are in Florida, 12 are in California, and nine are in Pennsylvania (from PharmaCann). That's 51 of 78 licenses in just three states. In other words, take the multistate figure that these marijuana dispensary stocks love to tout with a grain of salt.

A handful of dried cannabis buds lying atop a messy pile of cash.

Image source: Getty Images.

Are they profitable?

Last, but not least, the all-important question that store count doesn't dictate: Are these vertically integrated marijuana dispensaries profitable?

Generally speaking, the answer is no, they're not. That's because opening new locations, constructing cultivation farms, remodeling or renovating production facilities, marketing in-house brands, and making acquisitions to get around the long waits associated with state-level retail license applications are all costly.

However, there are a few profitable bright spots. For instance, Trulieve Cannabis, which again is highly focused on the Florida market with 26 of 27 currently open locations in the Sunshine State, has been very profitable. Sales in the third quarter totaled $28.3 million, compared to just $8 million in operating expenses. It would not be surprising to see operating expenses rise substantially as the company expands into California and Massachusetts, but it's been incredibly successful in the early going in Florida. 

Likewise, Harvest Health has also been profitable (albeit to a lesser degree) on an operating basis. Through the first nine months of 2018, Harvest Health recognized $17.4 million in gross profit before fair-value adjustments on biological assets and operating expenses of $14.4 million, leading to a non-adjusted operating profit of about $3 million. It, too, would be expected to see higher expenses as it works through its $850 million all-stock deal to buy Verano, but its initial performance has been promising.

As a whole, the entire dispensary space probably needs time to mature and consolidate. But it's certainly worth keeping a close eye on.