The Florida Cannabis Market Is Struggling

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 ninth New Cannabis Ventures monthly update. 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 on Friday by the state for the week ending 01/16. Readers who are interested in the data going forward can visit the OMMU update page.

Patient Growth Has Slowed

We last updated on the Florida market a little over a month ago, and the annual growth in patient count had fallen to 3.3% in mid-December  from 8.4% in late May.  The rate has remained similar to this low level and was 3.2% this past week:

While the number of patients is still increasing, the growth is very low and down substantially from just a few years ago. 898K patients represent 4% of the state’s population. The number of patients was declining but has increased slightly recently to a new high:

Some program improvements over the years have helped excite Florida residents about the medical cannabis program, which now has smokable flower and edibles. Then, the post-pandemic population boom aided patient growth. There has been an increase in dispensaries to 703 from 617 a year ago. This is an increase of 13.9%, which is much faster than the medical cannabis patient growth has been at 3.2%.

Unit Growth Remains Strong

We shared that Florida revenue was up only 1.4% from a year earlier in April 2024 by the estimate of BDSA. This was a record low. Florida’s growth picked up a bit afterwards, but in December, it rose only 1.8%. This is 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 increased by 11.5% from a year ago. Smokeable flower units expanded 15.7% from the week ending 12/12/23. Unit volume growths remain higher than the revenue gain and the patient gain. There are more stores, and unit volume is growing more rapidly than revenue.

Florida MSOs Are Weak

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, especially after the defeat of the adult-use ballot initiative last week. All four leaders in Florida have declined substantially though 01/17/25:

The overall market, as measured by the NCV Global Cannabis Stock Index, has declined by 39.1% since then as of 01/17, and the NCV American Cannabis Operator Index has dropped 61.0%. All of the Florida 4 have dropped by more than both of them.

Trulieve seems to be cutting its MMJ effort. In the most recent week, its units sold fell 9.1% from a year earlier, while the overall Florida market still managed to grow MMJ units by 4.8% despite this large company, currently at 28.6% market-share, seeing such a big decline. On the other hand, Trulieve flower sales increased by 29.3% from a year ago compared to the overall market expanding 19.6%. Trulieve now has a flower unit market-share of 40.1%.

Investors were disappointed that Florida voters did not pass the adult-use legalization ballot initiative, and they likely will not be happy with a mature medical market that is slowing and  becoming more competitive. Investors should remain careful in our view with the big Florida operators.