This important cannabis market may turn a new page – new cannabis projects


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friends,

Florida, the third most populous state with a population of 22 million, has a mature medical cannabis program dominated by publicly traded MSOs. The program was improved after initially limiting its patients to exclusively medicinal cannabis derivatives by adding the flower and then the nutrients. Florida releases weekly data, but it is not at all related to the size of the dollar. The Latest report from the Office of Medical Marijuana Use It is a good example of the type of information conveyed – number of patients and unit size for each licensed company by type:

Leading cannabis companies in Florida

The four leading companies, Trulieve, Verano Holdings, Curaleaf and Ayr Wellness, own more than 59% of the licensed dispensaries. In the week ending 9/15, they produced 74% of the produce manufactured in Florida and about 76% of the state’s flowers sold.

unusual program

The Florida program is unusual in that the market is almost vertically integrated, meaning that nearly all sales to customers are produced by the dispensary owner. There is very little wholesale activity. Thus, margins in a state tend to be higher than in other states. For example, projected 2023 EBITDA margins for Trulieve and Verano are 34.9% and 36.6%, respectively. This is significantly higher than their peers, who are 16% (Planet 13 Holdings) to 32.1% (Green Thumb Industries). While we don’t strongly anticipate the margin pressure in Florida that we’ve seen in other states, it will drop sharply if the state becomes significantly less vertically integrated. The Florida Supreme Court in May 2021 upheld this aspect of their program.

Florida hemp data

The state releases unit sizes each week, but does not share historical growth rates. Florida revealed that it now has 751,311 eligible patients, 3.4% of the state’s population, which is a healthy proportion. This week, growth from last year was 22.0%, a record low. At the end of 2021, the annual growth rate was 41.9%. Looking at the data from BDSA Analytics, one can get a better idea of ​​the dollar volume. In July, sales of $193.8 million grew 27.2%. This was slightly higher than the 24-25% annual growth rate in patients during the month.

A year ago, with patient numbers increasing 22.0% as of 9/15, MMJ products unit volume grew 23.6%, and flower sales were up only 11.7%. With strong but slow patient growth and companies improving their production capabilities, we believe the market can become more competitive even without moving toward wholesale.

Adult use could be coming

We don’t foresee major problems in Florida, and we also note that the state could move toward legal adult use and that we think it would be beneficial to incumbents. State residents could vote on adult use in 2024 if activists succeeded in collecting 900,000 valid signatures from registered voters.


As one of nine publicly traded US cannabis companies generating more than $100 million in quarterly revenue, Ayr Wellness is poised to capitalize on new growth from adult-transformed states such as New Jersey and Massachusetts. The company’s stock is down significantly to date, and results for the August second quarter came in line with expectations. Founder and CEO Jonathan Sandelman said: “With our core operating footprint, the vast majority of our capital expenditures behind us, and a strong cash position of $117 million on our balance sheet, we believe we are well positioned to weather this economic environment and appear stronger on the other side.” .

Get up to speed by visiting Ayr Wellness Investor dashboard which we maintain on their behalf as a customer of New Cannabis Ventures. Click the blue Follow Company button to stay updated on their progress.


New Cannabis Ventures publishes curated articles as well as exclusive news. Here are some of the most interesting business content from this week:

exclusives

Greenlight, a multi-state private operator, has 23 operating dispensaries and another 15 dispensaries under construction. The company, which has grown its footprint largely by winning licenses, focuses on midwestern states that compete I have generally overlooked. However, the company sees opportunities there as those countries prepare to transition to adult use. In an exclusive interview, CEO John Mueller, a serial entrepreneur, spoke about the company’s market presence, upcoming polling initiatives, and plans to grow the company.

sales data

Cannabis sales in Michigan sequentially retreated in August. Pharmaceutical sales fell 53.9 percent from a year ago to $18.5 million, down 12.4 percent from the previous quarter. Adult use sales expanded 50.9% year-over-year to $189.4 million, up 0.3% sequentially. Sales are up 26.1% so far this year at $1.45 billion.

earnings

Fire & Flower Q2 revenue decreased 6% to C$40.7 million from C$43.3 million in the same period last year. The company reported higher revenue with lower retail stores but also Significant drop in digital revenueWhich affected the company’s results for the second quarter. New CEO Stephane Trudel served in the position for only one month out of the reported quarter and said the company is “focused on transforming our business and strategic opportunities with the goal of achieving positive adjusted earnings and free cash flow.”

High Tide reported that third-quarter revenue nearly doubled to $95.4 million, compared to $48.1 million in the same quarter last year. Conversely, revenue increased by 18%. The company indicated that its results came despite gGlobal easing of e-commerce sales as pandemic-related restrictions are lifted. “I have always sought Under promise and more than offering. This is a value that I constantly instill in our team. We set goals and are held accountable as a team if we don’t meet them. “I am pleased to report that based on our most recent financial results, we are consistently beating our targets as they are communicated to the market,” said Raj Grover, President and CEO.


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sincerely,

Alan and Joel

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Alan Bruchstein, Chartered Financial Analyst

Houston-based Alan draws on his experience as the founder of the Internet community 420 investorsThe first and largest due diligence platform focused on stocks traded in the cannabis industry. Through his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. in New cannabis projectsHe is responsible for developing content and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst after more than two decades working in research and portfolio management. A prolific writer, with over 650 articles published since 2007 in Alpha searchwhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and recurring source To the media, including the New York Times, The Wall Street Journal, Fox Business, and Bloomberg TV. Contact now: Twitter | Facebook | LinkedIn | E-mail

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