If you look at the long-term prospects for cannabis companies, it's hard not to be positive about the potential in the industry. Just 10 years ago, only 18 states allowed the sale of medical marijuana, and of that group, only California, Colorado, and Washington also allowed legal recreational marijuana sales.

Fast forward a decade, and now 39 states and the District of Columbia allow medical-marijuana sales, and 21 states and Washington, D.C. also allow recreational sales of cannabis. Where will the industry be in another 10 years? It's possible by that time, the drug will be legalized or at least decriminalized at the federal level.

The name of the game: Growth and consolidation

A report by research firm BDSA estimated that global cannabis sales will go from $20 billion in 2021 to $57 billion by 2026, a compound annual growth rate of nearly 13%. In the U.S., the report estimated that U.S. sales will be $27 billion this year, up by 7% over the $25 million achieved in 2021.

That doesn't mean every cannabis company will succeed. At the MJ Biz Conference in Las Vegas earlier this month, Boris Jordan, the executive chairman of Curaleaf Holdings (CURLF -0.21%), said that in 10 years, there would likely be only a handful of large companies and the business would be similar to how tobacco companies operate in the United States. Jordan said:

This industry has to consolidate. There's no way there's going to be 35 or 40 or 50 or 100 cannabis companies 10 years from now. It's probably going to be three to four large operators, all of whom are probably going to be closely doing what the tobacco industry has done, in terms of their supply chain and their costs, in order to be able to earn a very healthy margin.

If that's the case, it's time to start looking for the most likely survivors. For that I see Curaleaf, Trulieve Cannabis (TCNNF -3.83%) and Green Thumb Industries (GTBIF -2.57%), three of the biggest U.S. multi-state operators (MSOs).

All three companies' shares are down significantly this year, but in the long run, they all have the size and revenue growth to last. Also, if marijuana is decriminalized at the federal level, they'll be able to take advantage of certain cost efficiencies that they don't have now because they can't transport cannabis across state lines.

The case for Curaleaf

Curaleaf continues to grow in size and revenue and is on its way to being profitable. The company has 142 dispensaries in 21 states and is particularly strong in the Northeast.

In the third quarter, the company reported revenue of $339.7 million, up 7% year over year and 1% sequentially. It was the company's 19th consecutive quarter of revenue growth.

Curaleaf said it lost $51 million in net income, but that's down from $55 million in the same period a year ago. Its third-quarter revenue number topped all U.S. cannabis companies. Curaleaf has built up its business through acquisitions, but now appears to be looking to maximize profits.

The company also is the largest vertically integrated cannabis company in Europe, which is a medical market now, but Germany is scheduled to allow adult-use sales in 2024. Other European nations will likely follow.

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The case for Trulieve

Trulieve operates 176 dispensaries across 11 states, making it the largest MSO by retail footprint in the United States. The company, until this year, was consistently profitable, but after its $2.1 billion purchase of Harvest Health and Recreation in 2021, its bottom line has suffered while it absorbs the new dispensaries.

Still, it's easy to see Trulieve being a dominant player -- if not the dominant player -- in cannabis. In the third quarter, it was No. 2 behind Curaleaf, with $301 in revenue, up 34% year over year but down 6% sequentially. The company reported a net loss of $115 million, though taking out non-recurring costs related to its acquisition of Harvest Health and the closing of its California dispensaries and wholesale operations in Nevada, it said adjusted net income was $4 million. 

Trulieve's most recent annual guidance said it expects $1.25 billion to $1.3 billion in revenue this year, compared to $938.4 million in 2021. It also expects between $415 million to $450 in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), compared to $374.6 million in adjusted EBITDA in 2021.

The case for Green Thumb Industries

Green Thumb was No. 3 in revenue in the most recent quarter among U.S. MSOs. While it's the smallest of these three, with only 77 dispensaries across 15 states, it's also the only one of the trio that has had positive net income for nine consecutive quarters.

In the third quarter, the company reported revenue of $261 million, up 12% year over year and 3% sequentially. Net income of $10 million was down from the $24.7 million it reported in the second quarter and the $21.5 million it had in the same period a year ago.

Green Thumb rolled out a plan that could spur growth. It has agreed, in a test case, to put 10 of its RISE Dispensaries adjacent to Circle K convenience stores in Florida next year, with the potential for more down the road. Circle K has 600 locations in the state.