Pennsylvania, with its 13 million residents, is the fifth-largest state and it could be the next big state to approve adult-use cannabis sales. The state's governor-elect, Josh Shapiro, said he would support adult-use sales, a position he had made clear going back to 2019 when he was the state's attorney general.

On top of that, Democrats, many of whom support adult-use legalization, will have control of the state's House, starting next year, for the first time in more than a decade. Then there's the FOMO (fear of missing out) factor as bordering states New Jersey, New York, and Maryland have approved adult-use sales and will reap the tax benefits from adult-use cannabis sales.

It's not a done deal yet, but now is a good time to buy three multi-state operators (MSOs) that already have significant operations in the state selling medical marijuana: Curaleaf (CURLF -5.43%), Trulieve Cannabis (TCNNF -5.06%), and Green Thumb Industries (GTBIF -3.86%).

Curaleaf is already planning ahead

In September, Curaleaf opened its sixth new medical dispensary this year in the Keystone State, giving it 18 retail locations overall in Pennsylvania, many of them in the populous eastern half of the state. The company has nearly 140 locations across 22 states, with the most dispensaries being in Florida.

The company has focused on growing revenue and while it isn't profitable, it is edging in that direction. In the third quarter, Curaleaf reported revenue of $340 million, up 7% year over year and 1% sequentially, and tops among all U.S. MSOs. It also reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $84 million, up 18% over the same period last year. Its earnings per share (EPS) loss was $0.07, compared to an EPS loss of $0.08 in the third quarter of 2021.

While federal laws prohibit transporting cannabis across state lines, the company may be able to benefit from some synergies in packaging and personnel with its four New York locations, six dispensaries in New Jersey, and four in Maryland.

Trulieve has had an eye on Pennsylvania

Trulieve, once only a dominant player in Florida, has branched out in the last few years and now leads the Keystone State with 19 dispensaries, with another in Bethlehem scheduled to open soon. A little more than two years ago, it had no dispensaries in Pennsylvania, but it has played catch-up in a big way.

On Dec. 6, the company announced it was partnering with Pittsburgh native Wiz Khalifa to carry the rap star's brand of medical marijuana, Khalifa Kush, at its Pennsylvania stores beginning Dec. 12. The brand is already available at Trulieve stores in Florida and Arizona and will soon be sold in Trulieve's Maryland dispensaries, the company said.

Trulieve is second among U.S. MSOs with $301 million in revenue in the third quarter, up 34% year over year, but down 6% sequentially. The company said it had $99 million in adjusted EBITDA, but also reported a net loss of $114.6 million in the quarter. Trulieve is still paying down its massive purchase of Harvest Health and Recreation last year, but taking out that transaction's related non-recurring costs, the company said it would have had a net income of $4 million. 

The company is already seeing big growth in Pennsylvania, which is a limited-license state. In the third quarter, the company's retail sales in the state nearly doubled compared to the first quarter of 2022, thanks to better sales of higher-level products.

Green Thumb Industries got in early

Green Thumb has 77 retail locations nationally and opened its 16th retail location in Pennsylvania in 2021. Though the company's headquarters is in Chicago, it has been in Pennsylvania since 2017 and has a bigger footprint there. 

It also has a manufacturing facility in Danbury, which it expanded on this year while amending its lease agreement with cannabis real estate investment trust Innovative Industrial Properties regarding the 152,000-foot facility. Green Thumb added a new electric substation for the property, along with new rooms for growing, processing, and production.

Of the three biggest cannabis players in the state, Green Thumb is arguably the healthiest financially, with nine consecutive quarters of positive net income, including $10 million in the third quarter, or $0.04 in EPS, in the quarter. It also reported revenue of $261 million, up 12% year over year and 3% sequentially, and adjusted EBITDA of $84 million, up $7 sequentially and 4% over the same period last year. 

Pennsylvania offers significant opportunities for each of these cannabis companies as the medical marijuana market there only covered 5% of the population as of May. With the growing number of recreational users, each company could be well-positioned in a strong market if adult-use sales are legalized. For investors with an appetite for the risky cannabis industry, these three MSOs could be worthwhile investments right now.