Market share trends in Florida (TCNNF, LHSIF/AYRWF, CURLF, GTBIF, CCHWF)
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday.
For the week ending December 24th, the number of qualified patients in Florida’s medical marijuana program grew 0.6% WoW or 52.7% YTD to 456,594 qualified patients with active ID cards. Over the Christmas holidays, all product categories had record-breaking sales volumes: THC in mgs sold grew 34.6% WoW to 194.9 million mgs, CBD in mgs sold grew 52.4% WoW to 4.8 million mgs, and flower in oz. sold grew 26.4% WoW to 65,567 oz. sold. THC grew 33.5% from their previous peaks, CBD grew 7.9%, and flower grew 23.9%. One dispensing location (VidaCann) was approved by the OMMU, bringing the total to 301.
On Tuesday, Trulieve announced it had opened its 70th dispensary in the state and 75th nationwide. As 2020 comes to a close, the company has added 28 dispensaries YTD and maintained approximately 50% market share in THC and flower sold.
Last week, Ayr Strategies announced its acquisition of Liberty Health Sciences in a transaction valued at $290 million. Liberty has been a chronic underperformer in Florida’s robust medical marijuana market. Despite holding a 9.3% share of approved retail units, the most recent data has Liberty with a 4.1% share of THC, a 1% share of CBD, and a 2.6% share of flower. While a medical marijuana dispensary in Florida can pull anywhere from $4 - $10 million in monthly revenues, Liberty has averaged $2 million. Ayr’s management has emphasized Liberty’s underperformance as a unique opportunity for exceptional upside – CEO John Sandelman framed the timing of the acquisition as a land grab as well. Liberty has 14 stores slated to open in 2021, and the company plans to add a least one store every month.
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.
Stem Holdings closes acquisition of California’s Driven Deliveries (STMH, SBVCF)
Stem Holdings, Inc., a vertically-integrated cannabis and hemp branded products company with state-of-the-art processing, extraction, retail, and distribution operations throughout the United States, announced that it had completed its previously announced acquisition of Driven Deliveries, Inc., an e-commerce and DaaS (delivery-as-a-service) provider with proprietary logistics and omnichannel UX (user experience)/CX (customer experience) technology. The combined entity will become ‘Driven By Stem.’ The California market has roughly 700 dispensaries statewide, putting 40% of the population living within 60 miles of a dispensary. According to the company, Driven Deliveries has built a network that serves approximately 02% of the California population through its platforms.
SBVCF/TPCO has likewise placed significant weight on the delivery opportunity in California. In recent acquisitions, TPCO has created a vertically integrated single-state operator projected to reach $185 million in revenues in 2020. Bulk wholesale is expected to make up 53.5% of 2020 revenues, while branded wholesale is expected at 23.8% and retail/delivery at 22.8%. However, by 2022, the company projects a sales mix shift that elevates delivery to 40.9% share, with retail comprising 17.7% and combines wholesale at 41.4%.
Caliva, one of TPCO’s acquisitions, currently reaches over 50% of California consumers through its existing platform for delivery. TPCO is expected to have the most significant consumer reach of any cannabis company in California, reaching 75% of consumers in the state by the end of 2021 and almost 90% by the end of 2022 through scaling of its omnichannel platform.
NY legislative activity increases on cannabis ahead of upcoming session.
New York lawmakers have pre-filed eight bills on medical marijuana ahead of the upcoming legislative session in 2021, a likely precursor for adult-use measures as Gov. Cuomo and the state’s top legislators ramp efforts for recreational legalization. Seven cannabis bills have been preemptively introduced in the Assembly and one in the Senate.
Some issues the proposed bills touch on:
- Requiring research on how taxes and banking are managed for the medical marijuana market.
- Categorizing medical marijuana as a prescription drug eligible for health insurance coverage.
- Expanding the qualifying conditions for medical marijuana.
