Market share trends in Florida (TCNNF, CURLF)
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday.
For the week ending August 7th, the number of qualified patients in Florida’s medical marijuana program grew 1.8% WoW or 30% YTD. The WoW increase to 389,235 qualified patients at 1.8% was the greatest sequential increase in the last 12-months.
THC in mgs sold fell -1.6% WoW to 132.3 million mgs, CBD in mgs sold fell -0.2% WoW to 3.87 million mgs, flower in oz. sold grew 2.0% WoW to 41,197 oz. sold.
Trulieve (TCNNF) continues its market dominance with a 51% share of mgs THC sold, 32% share of mgs CBD sold, and 51% of flower in oz. sold, while holding only ~20% of market share in units, on a 4-week moving average basis.
Florida’s medical marijuana marketplace is still in early stages with strong potential – the state’s medical marijuana program has yet to reach 2% of the population, smokable flower was just introduced to the market last year, and there’s a broad range of qualifying medical conditions, notably ‘severe and chronic pain’. The rising tide that is patient volume growth lifts all ships.
Curaleaf (CURLF) is on the Hedgeye Cannabis Long Bias List.
Trulieve (TCNNF) is a Hedgeye Cannabis Best Idea Long. For a replay of our Best Idea Long presentation CLICK HERE.
GNLN | Q2 2020 Earnings
On Friday, Greenlane Holdings (GNLN), a U.S. distributor of premium cannabis accessories and specialty vaporization products, reported financial results for the second quarter ended June 30, 2020.
Net sales were $32.4M in Q2 2020, compared to $53.0M Q2 2019 a YoY decrease of $20.6 million or 38.9%. The change in revenue is largely attributable to the FDA’s restriction on the sale of certain products, primarily mint-flavored JUUL, and the execution of Greenlane’s business transformation initiative, whereby the company deliberately moved away from low-margin JUUL sales, to focus on higher-margin products. JUUL sales decreased to approximately $2.3M in Q2 2020, from approximately $25.6M in Q2 2019. Net sales of Greenlane branded products grew to approximately $4.9 million, representing 15.0% of total revenue in Q2 2020, as compared to approximately $3.2 million in Q2 2019, or 6.1% of total revenue. The decrease in Q2 2020 net sales also reflects a full quarter of the impact that the COVID-19 pandemic placed on consumer purchasing behaviors and GNLN’s operations.
Gross margin did expand 350 BPS YoY to 20.8%, which management attributed to shifting its sales mix from lower-margin JUUL products to higher margin Greenlane brands. Adjusted EBITDA loss was $4.4 million in Q2 2020 compared to adjusted EBITDA loss of $1.2 million in Q2 2019.
In their earnings call, management suggested potential M&A activity around digital assets, with CEO Aaron LoCascio saying, “The pandemic has certainly made it quite clear that digital is a critical component of winning company strategies going forward. So, we’re very carefully looking at new technologies and different platforms to really build out our digital infrastructure going forward, which may involve M&A, but it may also involve just some organic building ourselves.”
In Ohio, medical marijuana firms deal with growing demand
While the state has been experiencing a spike in demand for products amidst the pandemic, medical marijuana firms are challenging the state to expand regulation to allow more dispensaries and cultivation facilities.
Georff Korff, founder of an Akron-based cannabis cultivator, said in an interview with Cleveland TV station WEWS, “Compared to a market like Pennsylvania, (Ohio’s medical marijuana program) is significantly behind where they are, and their program came online about the same time as ours.” He added, “There aren’t enough dispensaries (in Ohio), there aren’t enough access points. Folks that live in more rural locations sometimes have to drive upwards of an hour to get to a dispensary.”
YTD, Ohio’s medical marijuana program recently passed the $100M milestone in sales.
