The Florida Marijuana Market – Weekly Recap

Capital 10X breaks down the Florida marijuana market by looking at:

  • Weekly Market Moving News
  • Trends in the Florida Marijuana Market
  • Weekly Competitive Analysis

In a rapidly expanding market investors need to stay on top of who is growing like a weed and who is being squeezed out.

Weekly Florida Marijuana Market Moving News

10% Potency Cap On The Way?

Although a large number of bills have been filed for the relaxation of different cannabis laws, it appears as though Florida legislature might be moving backward.

This past week, the House filed a bill to cap THC potency at 10%, citing concerns on the potential health effects on developing brains of people 21 and younger. In comparison, edibles are capped at 10 mg per serving, or 200 mg total.

Veterans groups have already set up opposition, claiming it would restrict access to medication that patients need, while also driving up costs and forcing patients to illicit markets.

At this time, it’s unclear whether the bill will pass the senate. Luckily for advocates the Senate does appear to be the more moderate body compared to the house.

Trends in the Florida Marijuana Market

This week 1 new dispensary was opened, while the patient count increased by 1.27% compared to 0.91% last week, adding 4,038 new patients.

Growth of Florida Patient Count and Dispensaries

Source: Florida OMMU.

While patient count continues to grow, it will be important to watch consumption trends to see if patients are continuing to consume at their sky-high rates.

This week’s sales and sales per patient for extracts saw a dip. Total sales decreased 2%, while sales per patient decreased by 3% week over week.

Total flower sales saw a similar drop of 1%, while sales per patient decreased by 3%.

This regression is expected after multiple weeks of strong growth and hitting all-time highs. Demand per patient is still at very healthy levels, and with the market continuing to grow at ~1% per week, total sales should continue to press all-time highs.

Marijuana Concentrate Consumption

Source: Florida OMMU.

Marijuana Flower Consumption

Source: Florida OMMU.

Weekly Competitive Analysis

Now turning to the companies themselves, the following three graphs break down the market share of dispensaries, marijuana concentrate sales, and marijuana flower sales.

As a whole, investors looking to buy into the growing Florida market should look for companies with substantial market share. These players will capture an outsized portion of the market’s impressive growth.

This past week, one new dispensary was added, and the changes to the overall market share were small. In extract sales there were some modest change (e.g. Curaleaf falling 2.6%), however, there were no clear outperformers.

In flower sales, we saw one big change in market share with Curaleaf climbing 4% after multiple weeks of reduced sales. Their weekly sales are now in line with previous weeks before the recent two-week slump.

This increase in market share came at the expense of Trulieve, Liberty Health, and Fluent. Notably, Surterra also managed to climb 1.75%.

Market Share of Dispensaries

Source: Florida OMMU.

Market Share of Marijuana Concentrate Sales

Source: Florida OMMU.

Market Share of Marijuana Flower Sales

Source: Florida OMMU.

Week Over Week Absolute Changes in Market Share

DispensariesExtract SalesFlower Sales 
Trulieve-0.08%-1.75%-2.76%
Surterra Wellness-0.07%0.88%1.76%
Curaleaf-0.05%-2.61%4.09%
Liberty Health Sciences-0.04%0.53%-2.57%
Fluent-0.04%0.72%-2.45%
VidaCann-0.02%0.65%-0.42%
AltMed Florida (MüV)0.40%0.77%0.84%
GrowHealthy (iAnthus)-0.03%0.48%0.23%
Other-0.06%0.33%1.28%

Diving a little deeper, if you want to see the best return on your capital, you should invest in efficient operators. These will be the companies that generate a higher share of sales compared to their share of dispensaries.

Opening and operating dispensaries is very capital intensive. A company with a lot of stores but fewer total sales is using your capital inefficiently, signaling there are likely better investments.

The following graphs look at dispensary efficiency (x-axis) and market share (bubble size). Investors should look for companies that operate their dispensaries efficiently (highest ratio) while still capturing a meaningful portion of the total market (largest circle).

Market Share and Store Efficiency for Extract Sales

Source: Florida OMMU.

Market Share and Store Efficiency for Flower Sales

Source: Florida OMMU.

Companies with ratios greater than 1 are generating a higher proportion of total sales compared to their proportion of dispensaries — this signifies efficient operations. The size of the circle indicates how substantial their operations are relative to their peers. 

Invest in companies with higher efficiency and greater market share (large circle). For example, Trulieve and Curaleaf punch above their weight in extract sales, while Trulieve dominates the flower category.

Investors can get a more detailed view of how a company’s sales are divided between extract and flower in the following graph. This week saw Curaleaf return to a more equal distribution after two weeks of significantly reduced flower sales.

Extract and Flower Sales Per Store

Source: Florida OMMU.

Wrapping things up, we wanted to look at how companies have been performing over the medium term. This graph shows the change in total sales this week compared to the prior 4-week rolling average.

Any companies making significant gains could be up-and-comers to watch if you believe in the upside of the Florida market.

Sales Change for The Week Ending February 28th

Source: Florida OMMU.

Curaleaf finally bounced back this week, with flower sales breaking 1,900 oz compared to 880 oz the prior week and 370 oz the week before that. As expected, this shows significant growth for Curaleaf, even though they are only returning back to their average.

Notably, Fluent appears to have hit a flower supply issue, with sales halving (~420 oz) compared to previous weeks of ~1,000 oz.

In comparison, Trulieve appears to be largely holding on to their significant gains over the last 4 weeks with sales at 13,800 oz (8,700 oz week of Jan. 31).

For any investors looking to buy into the Florida market, the following graph shows stock price changes on a year-to-date (YTD) and week-to-date (WTD) basis. Keep in mind, only Trulieve and Liberty Health offer largely pure-play exposure to the market.

As expected with the market meltdown last week, all names were down last week, and continue to be down on a YTD basis.

Weekly and Yearly Stock Performance

Source: Florida OMMU.

iAnthus Capital Holdings was a market awareness client of Capital 10X.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Evan Veryard
Evan Veryard has a Bachelor's of Chemical Engineering from McGill University and a MaSc. of Chemical Engineering from RMC. He has over 6 years of research experience focusing on industrial materials. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.

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