Each week, Florida’s Office of Medical Marijuana Use (OMMU), which is part of the state’s Department of Health, releases data on the state’s medical cannabis program, including an active patient count, a qualified physician count, new dispensary approvals and an update for each operator. That data includes the number of dispensaries and the unit sales each week. This is the seventh New Cannabis Ventures article in what will likely be monthly updates. We also published a newsletter about the state in May, suggesting that readers be careful with Florida. This article is based upon the update that was provided this week by the state. Readers who are interested in the data going forward can visit the OMMU update page.
Patient Growth Is Slowing
We last updated on the Florida market a month ago, and the annual growth in patient count had fallen to 4.8% in early September from 8.4% in late May. The rate has dropped to a new record low and was 3.9% this past week:
While the number of patients is still increasing, the growth is very low. 886K patients represent 4% of the state’s population. The number of patients has actually slipped recently:
The post-pandemic population boom aided patient growth, and some program improvements have helped excite Florida residents. There has been an increase in dispensaries to 683 from 591 a year ago. This is an increase of 15.6%, which is much faster than the medical cannabis patient growth has been.
Unit Growth Remains Strong
We recently shared that Florida revenue was up only 1.4% from a year earlier in April by the company’s estimate. This was a record low. BDSA released September data, and Florida’s growth picked up a bit again, up 5.2% from a year earlier. This is still quite slow, especially considering patient growth and dispensary growth.
The increased competition and falling prices combined with slightly increasing sales has suggested that unit growth remains strong. In the most recent week, sales of medical cannabis product units with THC fell 1.1% from a year ago. A month ago, it grew 12.6% from a year ago, so this was a major change. Smokeable flower units expanded 10.7% from the week ending 10/04/23.
Conclusion
We warned readers on May 17th regarding the MSOs that are big in Florida, as investors seemed overly optimistic. The entire cannabis market has pulled back since then, and the entire group of MSOs is sharply lower. Three of the four leaders in Florida have declined substantially:
The overall market, as measured by the NCV Global Cannabis Stock Index, has declined by 20.6% since then, and the NCV American Cannabis Operator Index has dropped 27.6%. Three of the Florida 4 have dropped by more than both of these. One that we think will do very well if Florida legalizes for adult-use is Planet 13 (OTC: PLNH) (CSE: PLTH), which recently reported in August its first quarter that included VidaCann results, Q2. Since that mid-May piece, it has dropped less than all of these, falling 2.5%, which is outpacing the overall cannabis sector.
It’s not clear that Florida voters will approve adult-use legalization in November. If they don’t, the market likely will not be happy with a mature medical market that is slowing and becoming more competitive. If they do, it’s not yet clear that the four largest operators will win going forward. Investors should remain careful in our view with the big Florida operators.
