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 approvals and an update for each dispensary. That data includes the number of dispensaries and the unit sales each week. This is the fifth New Cannabis Ventures article in what we expect will provide updates every month. 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 5.8% in early July from 8.4% in late May. The rate is now at a record low of 5.3%:
While it is still increasing, the growth is very low. 885K patients represents 4% of the state’s population. 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 661 from 586 a year ago. This is an increase of 12.8%, which is 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 May and June data, and Florida’s growth picked up a bit, just over +5% from a year earlier for both months. It did pick up in July to 8.3%. Still, this is not really that rapid of growth.
The increased competition and falling prices combined with slightly increasing sales suggest that unit growth remains strong. In the most recent week, sales of medical cannabis product units with THC grew 9.1% from a year ago, while smokeable flower units expanded 13.0% from the week ending 8/10/23.
Conclusion
We warned readers on May 17th regarding the MSOs that are big in Florida. The entire cannabis market has pulled back since then, and the entire group of MSOs is sharply lower. The four leaders in Florida have declined substantially:
The overall market, as measured by the NCV Global Cannabis Stock Index, has declined by 22.2% since then, and the NCV American Cannabis Operator Index has dropped 29.2%. 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 (PLNH), which just reported its first quarter that included VidaCann results. Since that mid-May piece, it has dropped less than Curaleaf, AYR Wellness and Verano, dropping 20.7%.
It’s not clear that Florida voters will approve adult-use legalization in November. If they don’t, we think the market will not be happy with a mature medical market that is slowing and 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.
