Florida medical marijuana producer, Surterra Wellness, ordered to recall moldy flower (TCNNF, CURLF)
On Tuesday, the Florida Office of Medical Marijuana Use announced that the medical marijuana company, Surterra Wellness, was ordered to recall flower product (Granddaddy Purple Whole Flower) dispensed in July 2020 due to high levels of a common mold. Per the CDC, the mold Aspergillus can cause people with weakened immune systems or lung diseases to develop health problems. Surterra Wellness was ordered to immediately recall all contaminated product and notify all patients and caregivers that received the product.
Surterra Wellness has 39 dispensing locations in the state, as of the week ending August 14th. The company sold upwards of 15,000 oz of smokable flower for the month of July.
Alcanna’s (CLIQ) Q2 suggests the difficulties between Canada’s legal/illegal market
Alcanna is one of the largest private sector retailers of alcohol in North America and the largest in Canada by number of stores – operating 226 locations in Alberta and British Columbia. The company also operates 33 cannabis retail stores under the “Nova Cannabis” brand, with 32 locations in Alberta and one in Ontario.
In Q2, same-store liquor sales were up 13.4%. The stronger than expected same-store sales growth was primarily due to the consumption shift from on-premise to off-premise. While cannabis retail sales were up 63.9% YoY, the sales growth was in line with management’s pre-COVID-19 expectations. Unlike liquor sales, which surged due to COVID closing restaurants and bars, management said that the major competitor to their cannabis sales, the illegal market, continued unabated. Alcanna’s cannabis results are in stark contrast to that of the largest U.S. MSOs, which have beaten internal guidance and consensus estimates due to COVID catalyzing marijuana consumption in select U.S. markets.
Where adult-use cannabis beverage sales are at in Canada (CGC, STZ)
Data from Headset show cannabis beverage sales were over CA$3.6M in 1H20 for Alberta, British Columbia, and Ontario combined. In Alberta, cannabis beverage sales as of July made up 1.6% of the market, a 140 bps increase from January. In British Columbia, June’s cannabis beverage sales had 1.1% of the market, a 100 bps increase from January. In Ontario, June’s cannabis beverage sales had 1.4% of the market, a 120 bps increase from January. For 1H20, edibles (including beverages) had 5.3% share in Alberta, 4.9% in British Columbia, and 4.5% in Ontario.
As of their Q2 earnings call, Canopy had four beverages in the Canadian market and accounted for 74% of all ready-to-drink cannabis beverages sold YTD in Canada. Since March’s end, Canopy shipped over 1.2 million units of their cannabis beverages. The company’s beverage production doubled from June to July and is expected to double again in August. It remains to be seen as to whether cannabis beverages will take off as some companies, like Constellation Brands, are betting on. COVID may have dampened the launch of cannabis beverages in Canada due to less on-premise exposure.
