Florida Medical Patient Growth Slows Again

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 sixth 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 5.3% in early August from 8.4% in late May.  The rate is now at a record low of 4.8%:

While the number of patients is still increasing, the growth is very low. 886K patients represent 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 674 from 589 a year ago. This is an increase of 14.4%, 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 August data, and Florida’s growth picked up a bit, just over +4.6% from a year earlier. This is still quite slow.

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 12.6% from a year ago, while smokeable flower units expanded 19.0% from the week ending 9/07/23.

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. The four leaders in Florida have declined substantially:

The overall market, as measured by the NCV Global Cannabis Stock Index, has declined by 25.3% since then, and the NCV American Cannabis Operator Index has dropped 31.8%. 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 just 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 5.8%, 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.

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development 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 following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email