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 December 17th, the number of qualified patients in Florida’s medical marijuana program grew 0.7% WoW or 50.8% YTD to 454,078 qualified patients with active ID cards. Sales volume largely improved WoW: THC in mgs sold grew 16.8% WoW to 144.9 million mgs, CBD in mgs sold grew 11.3% WoW to 3.2 million mgs, and flower in oz. sold grew 8.5% WoW to 51,817 oz. sold. Two dispensing locations (AltMed, Fluent) were approved by the OMMU, bringing the total to 300.
This week’s sales volume data reflects a recovery for Trulieve following an uncharacteristic sales dip. During the week of Thanksgiving, Trulieve transitioned to a new online platform, which caused a spat of technical issues directly, an adverse impact on the patient level. With Trulieve’s market share in THC dropping to a low of 42.2% and flower to a low of 46.8%, sales temporarily fell. Close to a month later, Trulieve has a 23.3% share of approved dispensing units, a 50.7% share of THC sold, a 35.6% share of CBD sold, and a 53.2% share of flower sold, suggesting a return to its market-dominant position.
Verano Holdings, which has an announced merger with AltMed, plans on going public in the first quarter of 2021. The resulting entity will operate in 14 states with eight cultivation facilities and 48 active retail locations. 24 of those active retail locations are in Florida under AltMed Florida (MüV); AltMed Florida has been approved for a total of 28 dispensaries in the state, so four more are slated to open in the near-term. On a 4WMA, AltMed has a 9.4% share of approved dispensing units, a 10.8% share of THC sold, a 5.1% share of CBD sold, and an 8.2% share of flower sold. While it trails significantly behind Trulieve, as all the other Florida competitors do, AltMed places well amongst its peers in market share, ranking third in THC and flower based on volume sold.
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.
Clever Leaves lists on the Nasdaq (CLVR)
CLVR is on the Hedgeye Cannabis LONG Bias List.
Clever Leaves, a leading MNO operator and a licensed producer of pharmaceutical-grade cannabinoids, completed their business combination with a SPAC and began trading on the Nasdaq this past Friday. Clever Leaves Holdings, the newly formed holding company, completed its previously announced acquisition of Schultze Special Purpose Acquisition Corp. and Clever Leaves International for approximately $205 million. Kyle Detwiler, formerly CEO of Clever Leaves International, will lead the new company.
While its primary operations are in Colombia, the company has operations and investments in Canada, Germany, Portugal, and the United States. Clever Leaves currently has a cultivation footprint of roughly 1.9 million sq. ft., with 1.8 million sq. ft. in Colombia and 110,000 sq. ft. in Portugal. Current internal projections for 2021 revenues and EBITDA are $72 million and $11 million, respectively, with a gross profit margin of 67%.
The company is on track towards becoming a formidable competitor to Canadian LPs in the European market. The company has one of the most extensive cultivation and extraction operations in Latin America and is among the world's largest, including Canada's licensed producers and top extractors. The company has the advantage of low-cost operations due to favorable climate conditions and cheaper labor than its Canadian peers. The average cost per gram by Clever Leaves' Colombian operation is USD 0.20 – Canadian operators run upwards of USD 1.71 (average of APHA, ACB, OGI, and TLRY). In an example of its B2B market potential, Clever Leaves has already signed a regional supply agreement with Canopy Growth (CGC) – the Canadian company outsourced its LatAm operations to Clever Leaves in April 2020. Under the one-year deal, Clever Leaves will supply CGC with cannabis extract products with an option to renew for two additional years.
We are bullish on Clever Leaves and believe in the company's opportunity: the company is early stage, the global cannabis opportunity is significant, and Clever Leaves appears to be positioned for material revenue growth coupled with a very desirable cost structure in 2021 and beyond.
Earlier this month, we hosted a conversation with Clever Leaves CEO Kyle Detwiler.
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CLICK HERE for a video replay. |
Acreage Holdings appoints a new CEO (ACRHF, CGC, STZ)
Acreage Holdings has appointed Peter Caldini, a former top executive with Pfizer, as its new chief executive officer. Caldini officially joins today.
Most recently, Caldini served as the CEO of Bespoke Capital Acquisition Corp., a cannabis SPAC formed in August 2019. the CEO of Bespoke, he helped raise $360 million on the Toronto Stock Exchange with the focus to acquire high growth cannabis companies in the US and around the globe. Additionally, Caldini has served for the past year as a Senior Advisor to Tuatara Capital, L.P., a cannabis-focused private equity fund.
Caldini has also served as President Pfizer North America Consumer Healthcare as well as Regional President Consumer Healthcare of EMEA during his time with the company. Before Pfizer, Caldini held similar senior leadership positions in other global markets, including China and Europe, while at Bayer Consumer Health and Wyeth Pharmaceuticals.
In its Q3 2020 earnings, the company missed consensus estimates on the top line; however, there was a slight improvement on the margins. The company reported revenues of $31.7 million versus FactSet Consensus $36 million, an increase of 17% QoQ, and 42% YoY. Partner revenue was $17.0 million, growing 2% QoQ and 79% YoY. Gross margins were at 42.5%, improving 110bps QoQ but falling 80bps YoY. The YoY gross margin decline was largely due to a one-time significant wholesale opportunity in Massachusetts, which did not repeat this year. Adjusted EBITDA was a loss of -$6.9 million compared to a loss of -$11.7 million in the same period in 2019.
Kevin Murphy, Acreage Founder and Chairman of the Board expressed his optimism for Caldini changing the company’s narrative as an underperforming MSO: “Cannabis is in the early innings of development, and the winning organizations will be those led by executives with a strong track record of success in highly regulated industries, particularly in CPG and healthcare. As Acreage’s largest shareholder, I could not be more confident that the future of Acreage is indeed in great hands with Peter.”
