Market share trends in Florida (TCNNF, CURLF, GTBIF, CCHWF, LHSIF)
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday.
Trulieve is a Hedgeye Cannabis Best Idea LONG. The company reports earnings tomorrow before markets open.
For the week ending November 12th, the number of qualified patients in Florida’s medical marijuana program grew 0.4% WoW or 47.6% YTD to 441,499 qualified patients with active ID cards. The state’s medical marijuana program recently passed the 2% milestone in terms of population penetration rate. Sales volume fell after a record week; the severe tropical storms that swept over the state last week may have played a role in weakening demand. THC in mgs sold fell -11.9% WoW to 127.5 million mgs, CBD in mgs sold fell -17.4% WoW to 3.4 million mgs, and flower in oz. sold fell -6.8% WoW to 46,563 oz. sold. Four dispensing locations were approved by the OMMU this week: one for AltMed Florida, one for GTI, and two for Trulieve.
On a 12WMA, Trulieve’s THC in mgs sold per dispensing location continues to maintain a strong lead. It’s a similar story for flower sold per dispensing location. While still far behind Trulieve, GrowHealthy has been showing sustained improvement with flower. On a 4WMA, Trulieve maintains a disproportionate market share, with 51.3% share of mgs THC sold, 39.5% of mgs CBD sold, and 55.4% of oz. in flower sold, at just 22.6% 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.
Village Farms International Earnings (VFF)
Village Farms is on the Hedgeye Cannabis LONG Bias list.
The Canadian greenhouse produce company, now cannabis licensed producer through its acquisition of Pure Sunfarms, reported Q3 revenues of $43.0 million, decreasing -9.5% QoQ but increasing 12.4% YoY. The improvement in sales was due to increased pricing for tomatoes, an increase in grocery store traffic due to COVID-19, and an increase in the company’s third-party pepper contracts. Adjusted EBITDA grew to $2.2 million in Q3 compared to -$1.9 million in the comparable year prior. The acquisition of Pure Sunfarms, a Canadian cannabis firm, was completed on November 2, so accordingly, Pure Sunfarms results are not consolidated for the third quarter.
Pure Sunfarms had its seventh consecutive quarter of profitability. On a standalone basis, the company had net sales increase 75% QoQ to C$22.6 million. Net sales to provincial buyers (retail) increased 30% QoQ to C$12.0 million; Gross profit increased 81% QoQ to C$7.8 million; Net income increased 200% QoQ to C$3.2 million, and Adjusted EBITDA increased 125% QoQ to C$5.6 million. The cannabis company has a strong presence in the Ontario market, with a 15.2% brand market share of the dried flower category (by kilograms sold) in October 2020.
West Virginia announces ten recipients of medical processing licenses (TCNNF, CCHWF)
The West Virginia Department of Health and Human Resources, Bureau for Public Health, Office of Medical Cannabis (OMC), announced the successful applicants for medical cannabis processor permits, including public MSOs, like Trulieve and Columbia Care, and private MSOs, like Verano and Holistic Industries. The West Virginia Medical Cannabis Act, passed in 2017, enables West Virginia residents with a serious medical condition to procure medical cannabis for certified medical use in the following forms: pill; oil; topical forms including gels, creams or ointments; a form medically appropriate for administration by vaporization or nebulization, dry leaf or plant form; tincture; liquid; or dermal patch.
The state of nearly 1.8 million is slated to begin issuing patient cards for the medical marijuana program in spring 2021. This process permit marks the sixth state where Trulieve has operations. CEO Kim Rivers commented, “As a processor, we look forward to bringing our Trulieve brand to West Virginia through wholesale opportunities, partnering with other companies to bring their products to market in the state, and executing on our strategic vision to be the leading customer-focused cannabis brand in the United States, with depth in the markets we choose to operate in."
While the company did win a processing license, it was left out of the initial round of licenses granted for cultivation in the first week of October. Columbia Care has been granted a license for both cultivation and processing. The OMC has yet to grant licenses for dispensaries.
Processing permit recipients are listed below:
