Below is a brief excerpt from a complementary research note written by our Cannabis analyst Howard Penney. We are pleased to announce our new Sector Pro Product Consumables Pro. Click HERE to learn more.
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday. This week’s date was released yesterday due to the Thanksgiving break.
For the week ending November 26th, the number of qualified patients in Florida’s medical marijuana program grew 0.1% WoW or 48.4% YTD to 443,917 qualified patients with active ID cards.
Qualified patient adds slowed significantly, likely due to the Thanksgiving holiday. Despite most dispensaries closing for Thanksgiving Day, THC in mgs sold actually increased 1.8% WoW to 139.6 million mgs. CBD in mgs sold fell -5.4% WoW to 3.3 million mgs, and flower in oz. sold fell -16.5% WoW to 40,790 oz. sold.
Notably, Trulieve’s sales volume dropped across all categories. Compared to the prior week, THC in mgs sold fell -14.2%, CBD in mgs sold fell -30.8%, and flower in oz. sold fell -29.5%. This sales volume decrease translated to Trulieve’s market share this week contracting to 42.2% for THC, 31.3% for CBD, and 46.8% for flower.
The sudden decrease comes as the company apparently transitioned to a new website and online system last week, which timed poorly with increased demand due to their Black Friday promotions and the holiday break.
Patients took to Facebook, Twitter, Instagram, and Reddit to vent their frustrations at out-of-stocks, online orders being cancelled, long waits for in-person pickup, and difficulty reaching customer service.
It seems that this week’s underperformance and debacle by Trulieve can be primarily explained by this new online platform incorrectly showing in-stocks for certain SKUs, failing to process a significant volume of online orders, and causing supply chain issues.
Overall, this appears to be a one-off event produced by a technological issue not material to our long thesis for Trulieve.
Florida’s medical marijuana marketplace has 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.