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 21st, the number of qualified patients in Florida’s medical marijuana program grew 1.1% WoW or 34% YTD – falling just short of 400,000 qualified patients with active ID cards.
AltMed Florida was the only MMTC approved for a new dispensary this week, adding a location in Port St. Lucie, which brings the number of approved dispensing locations to a statewide total of 270. THC in mgs sold grew 5.3% WoW to 119.1 million mgs, CBD in mgs sold grew 1.6% WoW to 3.7 million mgs, flower in oz. sold slightly fell -0.1% WoW to 46,095 oz. sold.
Trulieve (TCNNF) is the dominant player in Florida’s medical marijuana market. On a 4WMA basis, their market share of mgs THC sold rose to 50.0%. Trulieve held 31.8% share of mgs CBD sold and 50.6% of flower in oz. sold with only ~20% of market share in units. In the charts below, Trulieve’s market share can also be visualized on a THC in mgs sold/flower in oz. sold per dispensing location, on a 12WMA basis. In terms of THC, Trulieve vastly outpaces its competitors on the average amount sold across its operating locations – AltMed Florida and Curaleaf (CURLF) lag behind Trulieve by more than 600,000 mgs of THC sold. In the smokable flower market, Trulieve continues to widen its lead relative to its closest competitors, like Surterra Wellness, AltMed Florida, Curaleaf, and GrowHealthy.
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.
Cannabis retailer High Tide (HITIF) to acquire Meta Growth Corp. (META), creating Canada’s largest cannabis retail chain
Last Friday, High Tide Inc. announced that it would be acquiring Meta Growth Corp. to create Canada’s largest cannabis retailer, with 63 retail location and CA$133M in annualized revenue. High Tide estimates that they will incur annual cost and operational synergies of approximately CA$8M to CA$9M expected within 12 months of closed transaction. The combined retail network will span across Ontario, Alberta, Manitoba, and Saskatchewan. The High Tide/Meta Growth entity will rank #1 in Ontario based on corporate owned store count and will have high-graded its Alberta portfolio to hit the maximum stores allowed.
Growth plans include nearly doubling current footprint to approximately 115 locations by the end of 2021 with a focus on Ontario, Canada’s largest cannabis market. Meta Growth CEO Mark Golinger commented, “Both companies have complementary retail footprints and similar proven operational efficiency models. We can immediately leverage synergies, increase margins and have double the scale for the combined company’s owned IP and private label initiatives. The new company is now bigger, better and stronger with positive momentum to help break through to new levels and profitability. With ten years of retail experience, I am confident that Raj Grover, as CEO, will be able to steward this company to the next stage of its growth.”
As of July 2020, there were over 1,000 cannabis retail stores across Canada. CEO James Burns of Alcanna, a Canadian liquor and cannabis retailer, commented on coming margin contractions for cannabis retailers in their Q2 earnings call: “Our stores have been extremely stable on a sales per week basis because we're in good locations. But these ones who are in terrible locations which is the vast majority of them are just having more and more stores sharing tinier and tinier pieces of their part of the pie. And the only competitive response people in that situation can do over time, if you look at any retail one-on-one is drop prices. You can't do more marketing, because you can't market. So, we don't anticipate margins staying in the competitive environment at this level for too much longer in Alberta.”
For cannabis retailers in Canada, the headwinds are numerous: there is an increasingly crowded competitive landscape with new entrants, an illicit market with light regulation is thriving, and declining wholesale prices, while a temporary boon to margins, make for an unsustainable environment for positive margin growth.
Also in Canada: June legal cannabis retail sales exceed CA$201M
For June, Canadian legal retail sales surpassed CA$201M, a 120% YoY increase and an 8.2% MoM increase. Each province showed positive MoM growth in June: Ontario, with a 24.3% share of June sales, grew 18.8% MoM; Alberta, with a 23.2% share of June sales, grew 0.9% MoM; Quebec, with a 19.9% share of June sales, grew 3.8% MoM. Ontario beat Alberta in posting the highest sales – Ontario added 35 units in June, while Alberta added 27 units, according to data from Cannabiz.media. Both provinces added 10 units in May. June’s sales seem to be driven by increased retail storefronts and the continued rollout of Cannabis 2.0 products.
However, sales in Ontario may be due for pullback for July and August’s data. Ontario private retailers saw sales drop after the emergency order permitting legal cannabis delivery/pickup expired at the end of July.
According to estimates from the Ontario Chamber of Commerce, the Canadian province could lose out on C$180M in economic activity from cannabis retailers being barred from providing delivery/ pickup services. The economic activity loss rises to CA$1B if the 450 private retail outlets which are ready to open, but whose license applications are pending provincial regulatory approval, are included. The emergency order, which temporarily permitted legal cannabis delivery/pickup amid the pandemic, expired at the end of July.
