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 17h, the number of qualified patients in Florida’s medical marijuana program grew 1.0% WoW or 39.2% YTD to 416,304 qualified patients with active ID cards. THC in mgs sold grew 5.6% WoW to 134.5 million mgs – this is the third highest amount of THC sold in a week since Florida’s medical marijuana program began. The two weeks with the highest amounts of THC sold occurred in the first and last week of July. While its still early days, the increase could be attributable to the introduction of edibles at the end of August. CBD in mgs sold declined -13.9% WoW to 3.8 million mgs, and flower in oz. sold grew 3.0% WoW to 44,131 oz. sold.
On a 12WMA, Trulieve’s THC in mgs sold per dispensing location had a meaningful uptick by 159 bps. The company has hovered between 1.1M to 1.2M mgs since the beginning of May, with an overwhelming lead compared to other operators. AltMed Florida and Curaleaf, while far below Trulieve’s efficiency, are showing positive WoW growth. AltMed has been showing the stronger trend on this front. The dynamics are similar with flower – Trulieve has been selling close to 400 oz. per dispensing location since June. During that same time, Surterra Wellness, AltMed Florida, and GrowHealthy have slowly been improving their flower sales by weight per approved retail units. Interestingly, iAnthus Capital-owned GrowHealthy is posting strong improvement in flower – somewhat at odds with the company’s implosion.
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, edibles were just introduced to the market in August, 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.
Record adult-use sales in Canada for July (APHA, CGC, CRON)
Canadian adult-use retail sales grew to a record CA$232M in July, a 116% YoY increase and an 15.2% MoM increase. July’s sales suggest annualized revenues of CA$2.8B.The three provinces with the strongest sales were: Ontario, with a 26.0% share of July sales, grew 23.5% MoM; Alberta, with a 22.4% share of July sales, grew 1.0% MoM; Quebec, with a 19.0% share of June sales, grew 9.8% MoM.
The Canadian marijuana market is showing robust, organic growth. However, for Canadian operators, 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. Canadian LPs are still grappling with the country’s oversupply issue which has led to inventory write-downs and impairment charges.
Market dynamics are shifting in favor of legal cannabis in Canada – in Q2, the legal market outpaced the illicit market for the first. Yet the pricing gap between the legal and illicit market, combined with “grey market” operations illegally selling cannabis, is slowing this consumer shift. Heading into 2020, Statistics Canada’s Cannabis Implicit Price Index indicate that both medical and recreational continued to be elevated far above illicit cannabis prices.
South Dakotans favor legalization according to new poll
Ironically, in a statewide poll conducted by campaign committee ‘No Way on A,’ an anti-marijuana initiative, 60% responded that they intend to vote for legalizing recreational marijuana. Support reached 70% in support for medical marijuana come this November.
While South Dakota only has a population of ~900K people, the Midwest state permitting recreational and medical usage would build up legalization momentum nationwide. Besides South Dakota, there are currently four other states voting on a legalization measure this November: Arizona (recreational), Mississippi (medical), New Jersey (recreational), and Montana (recreational).
