Market share trends in Florida (TCNNF, CURLF, GTBIF, CCHWF, LHSIF)
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday.
For the week ending November 5th, the number of qualified patients in Florida’s medical marijuana program grew 0.3% WoW or 47.1% YTD to 439,838 qualified patients with active ID cards. The state’s medical marijuana program recently passed the 2% milestone in terms of population penetration rate. However, this week’s sales volume was lackluster across all categories, and patient growth posted its lowest WoW growth since the end of May. THC in mgs sold fell -4.9% WoW to 123.1 million mgs, CBD in mgs sold fell -0.8% WoW to 3.6 million mgs, and flower in oz. sold fell -4.6% WoW to 44,754 oz. sold.
On a 12WMA, Trulieve’s THC in mgs sold per dispensing location shows a slight downward trend while its flower sold per dispensing location has been trending upwards. On a 4WMA, Trulieve maintains a disproportionate market share, with 50.4% share of mgs THC sold, 39.7% of mgs CBD sold, and 54.6% of oz. in flower sold, at just 22.4% share of dispensing locations.
Florida’s medical marijuana marketplace is still in early stages with strong potential – the state’s medical marijuana program still has a runway for population penetration, 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.
Curaleaf sells Maryland assets to TerrAscend, moves to a higher capacity facility (CURLF, TRSSF)
In a win-win transaction, Curaleaf sold one of its cultivation and processing assets in Maryland to TerrAscend, enabling the former to optimize its presence in the state and the latter to enter a limited license medical marijuana market.
Last week, Curaleaf announced a pair of planned asset divestitures in Maryland for a combined $31.5 million in total proceeds. The company sold its rights to its HMS Health LLC and HMS Processing LLC ("HMS") assets in Maryland to TerrAscend for a total consideration of $27.5 million. The HMS asset sale includes the divestiture of operations in a 22,000 sq. ft. co-located cultivation and processing facility in Frederick, MD. The company also closed its sale of Curaleaf Maryland, Inc., which holds a processing license in Cumberland, MD, for a total consideration of $4.0 million – Curaleaf did not disclose the buyer. For TerrAscend, the acquisition is expected to be immediately accretive on an EBITDA basis.
With its earlier acquisition of Grassroots, Curaleaf had two cultivation/productions assets in the state, necessitating this divestiture. The completion of the HMS transaction will allow Curaleaf to move forward, subject to regulatory approval, with its proposed acquisition of Grassroots-owned Maryland Compassionate Care and Wellness, LLC, which operates a 55,000 sq. ft. co-located cultivation and processing facility.
As of November 2nd, Maryland’s medical marijuana program had 118,762 certified patients, approximately 1.96% of the state’s population. The state’s medical marijuana sales have been robust, with high double-digit YoY growth. The state has ‘severe or chronic pain’ as a qualifying medical condition, a broad category that expands the potential patient base. September retail sales were $40.2 million, putting year-to-date sales at $322.9 million. September’s sales represent $482.9 million on an annualized basis.
NY & CT governors continue signaling adult-use legalization in the near-term
NY’s Gov. Andrew Cuomo continued sharing his intent for NY to go recreational in comments late last week to North Country Public Radio in Canton, New York, saying, “I think this year it is ripe because the state is going to be desperate for funding.”
CT’s Gov. Ned Lamont, when asked in an interview on Yahoo Finance Live if he’d pursue adult-use legalization in 2021, said, “I think so. Right now, I’m surrounded by states – New Jersey and Massachusetts – where marijuana is already legal. I don’t need a lot of people driving back and forth across the border.”
With the legislative momentum of the recent election, there’s tremendous potential for the Northeast region to build one of the world's largest cannabis markets. In our Cannabis Speaker Call this past Friday, we hosted a call with two expert speakers to help us through the industry's election implications. Andre Haroche is a co-founder of Silverleaf Venture Partners, a cannabis-focused venture capital firm. J.T. Taylor is Hedgeye's Chief Political Strategist.
In our conversation with Andre and J.T., we cover where we think the industry is headed with the across the board victories of state ballot initiatives, assess how legislative dynamics could impact companies in the space, take a closer look at key political figures and their stances on cannabis, and map out potential legislative timelines for reform (SAFE, STATES, MORE, and descheduling).
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