Why MSOs Are So Bullish on the Florida Medical Cannabis Market

You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.

Subscribe to receive our free weekly newsletter in your inbox each Sunday morning.


Florida was one of the most discussed topics on Q1 conference calls across the sector this past month. Cresco Labs, of course, talked about how it plans to scale in the state following the closing of the acquisition of Bluma Wellness in mid-April. Ayr Wellness, which acquired Liberty Health Sciences earlier this year, announced an important change ahead on its conference call: It is moving its corporate headquarters to Florida later this year. GTI, in response to a question, suggested that some of the recently raised capital will be deployed into the state, and Columbia Care and Curaleaf spoke very optimistically about their operations there.

The state is well penetrated by MSOs, which of course include the market leader, Trulieve, as well as Parallel, Verano, Cansortium, iAnthus, MedMen, Harvest, and Red White & Bloom. The only non-MSO with more than one dispensary open is VidaCann. In fact, of the 339 open stores, over 93% are owned by an MSO. The MSOs sold over 98% of both the flower and the non-flower products in Florida during the most recent week ending May 27th.

Florida is rather unique, with complete vertical integration. There is no wholesale market: Every gram sold to a customer must be produced by the company operating the dispensary. This past week, the Supreme Court upheld a lower court ruling that had rejected a challenge to vertical integration, removing the risk of the state being required to permit new entrants. Because of the market structure, the operators enjoy extremely high margins.

The growth of the program has been extraordinary. In the most recent week, the number of patients surpassed 567K (2.5% of the state population), up 65.6% from a year ago and 152% from two years ago:

We have discussed the resurgence in growth since COVID-19, driven by a number of factors that include the implementation of telehealth for patients to get their cards as well as the recent introduction of edibles. Another factor has been the population growth in the state over the past year.

Flower wasn’t permitted until two years ago and continues its robust growth. Year-to-date, unit volume of cannabis flower has increased 102%, growing faster than the growth in patients. Medical cannabis product units dispensed has grown 82%. BDSA recently began publishing data on the market, with Q1 sales in Florida totaling $392 million. In March, flower and pre-rolls accounted for 49% of the market. Concentrates were 40%, and the recently introduced edibles represented 8% of the market.

The effort to legalize for adult-use hit a roadblock in April, with a ballot initiative for 2022 struck down by the state’s Supreme Court. The timeline for potential legislative action is unclear, but, even without the prospects for adult-use, the booming medical market, with few barriers to access by patients, bodes well for the MSOs operating in Florida. For many of them, the challenge has been scaling cultivation with high temperatures and humidity levels.

It’s easy to see why the MSOs are so excited about Florida. The number of patients continues to soar, the potential for a change to the vertical integration market structure just disappeared, their operations are scaling, and edibles offer another market opportunity.

With a deluge of new investors relying on social media as a source of investment news and opinions from anonymous people, it can be extremely challenging to figure out what’s actually worth paying attention to. Understanding what news is material and what will drive share price and valuations is paramount as a cannabis investor. Being able to decipher complex M&A deals, capital raises and company earnings quickly is equally critical.

Get the facts and be ready for important milestones and catalysts with a subscription to Alan Brochstein’s 420 Investor, the longest running due diligence platform trusted by cannabis investors for over 7 years. The primary goal of 420 Investor is to provide professional, real-time, objective information about the top cannabis companies in the market in order to help investors Capitalize on Cannabis™.

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

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Get ahead of the crowd! If you are a cannabis investor and find value in our Sunday newsletters, subscribe to 420 Investor, Alan’s comprehensive stock due diligence platform since 2013. Gain immediate access to real-time and in-depth information and market intelligence about the publicly traded cannabis sector, including daily videos, weekly chats, model portfolios, a community forum and much more.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer a family of indices to track Canadian licensed producers as well as the American Cannabis Operator Index and the Ancillary Cannabis Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks that generate industry sales of more than US$12.5M per quarter.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.


Alan & Joel

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
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

Get Our Sunday Newsletter