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 September 3rd, the number of qualified patients in Florida’s medical marijuana program grew 1.2% WoW or 37% YTD to 409,642 qualified patients with active ID cards.
VidaCann was approved for a new dispensing location, bringing its total approved locations to 16. THC in mgs sold fell 4.9% WoW to 120.3 million mgs, CBD in mgs sold fell -3.0% WoW to 4.0 million mgs, and flower in oz. sold slightly grew 1.2% WoW to 42,790 oz. sold.
Trulieve (TCNNF) is the dominant player in Florida’s medical marijuana market. On a 4WMA basis, Trulieve has 20.8% share of approved dispensing locations. The company holds 48.9% share of mgs THC sold, 36.0% share of mgs CBD sold, and 50.2% share of flower in oz. sold. On a 12WMA, THC in mgs sold per dispensing location has hovered between 1.1M to 1.2M mgs since the beginning of May. AltMed Florida and Curaleaf, while far below Trulieve’s efficiency, have showed positive WoW growth for the past month. In terms of flower, Trulieve has been selling close to an average of 400 oz. per dispensing location since June. During that same time, Surterra Wellness, AltMed Florida, Curaleaf, and GrowHealthy have slowly been improving their flower sales by weight per approved retail units.
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.
Pennsylvania Republican leader suggests that recreational legalization unlikely this fall
In recent comments on recreational marijuana to The Courier Express, Pennsylvania Senate Majority Leader Jake Corman said, “Like with any issue, a bill would need to work its way through the Senate Committee process to be vetted. Movement on this issue should not be expected his fall.” Gov. Tom Wolf (D) has heavily criticized the Republican-led legislature for their inaction on recreational marijuana legalization. Wolf has been ramping support for recreational legalization to offset the economic pressure brought by the pandemic.
In Québec, the legislated monopoly cannabis retailer more than doubles top-line YoY for Q1 FY21 (HEXO, APHA, CGC, TLRY)
The Société Québécoise du Cannabis (SQDC) is a government corporation mandated to distribute and sell cannabis in Québec with a focus on protecting customers' health and safety. They have a legislated monopoly on the sale of recreational marijuana in Québec with the long-term goal of shrinking the illicit market. For their Q1 FY21, which began March 29, 2020, and ended June 20, 2020, the company had sales of CA$110.4M, an increase of 144% YoY. Net income was CA$9.7M, increasing CA$8.4M YoY. The SQDC contributed its significant growth to its retail unit expansion, with 42 storefronts operating as of June 2020 compared to just 16 a year prior.
Sales corresponded to 18,922 kgs of cannabis sold in the quarter, with 86 % of revenue from their brick-and-mortar store network and 14% via their online channel. Like most retailers, the company noted that COVID has led to a decrease in the number of transactions but also to an increase in the average in-store shopping cart. Online, the number of transactions rose sharply early in the quarter before gradually returning to a more normal growth rate late in the quarter. In an update on its overarching goal to reduce Québec’s illicit market, the SQDC believes it has a 40% share of the province’s total cannabis market.
Québec comprises approximately 22.6% of Canada’s population, and as of the most recent monthly data (June), made up 19.9% of total legal sales in the country. The SQDC has commented that it plans on opening 70 locations by the end of March 2021 and 100 by March 2023. The SQDC has at least 14 supply agreements with Canadian LPs.
So far, HEXO has the largest deal with the SQDC. In April 2018, HEXO signed a 5-year preferred supplier agreement with an estimated volume of 200,000 kgs, covering the full range of the company’s products and brands. Under the agreement, HEXO supplied 20,000 kg of products in the first year of the agreement, 35,000 kg in the second year and 45,000 kg in the third. In April 2018, APHA finalized a three-year supply agreement to supply up to 12,000 kgs annually. CGC and TLRY have also signed smaller supply agreements with the government-owned company.
