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A Snapshot Of America's Medical Marijuana Markets: Florida

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A Snapshot Of America's Medical Marijuana Markets: Florida

Florida voters legalized medical cannabis on Nov. 8, 2016.

Since then, the state has made significant strides in market growth and product access.

Florida is the second fastest-growing medical market in the country, according to an August 2019 report from Marijuana Business Daily. That growth could extend to the job market: a reported 100,000 jobs could be generated by the sector. 

The companies driving Florida's medical market include Trulieve Cannabis Corp (OTC: TCNNF), Curaleaf Holdings Inc (OTC: CURLF) and Surterra Wellness, now known as Parallel.

Leer en Español en El PlanteoMarihuana Medicinal en Florida: Cannabis Legal en EEUU

Patient Enrollment Rises As Flower Becomes Available 

Parallel operates 36 dispensary locations in Florida, COO Kevin Fisher told Benzinga. 

The Sunshine State has its own set of pain points. In August, it was reported that nearly one-third of Florida’s registered patients had quit the program. Businesses have clashed with regulators over licenses, threatening to take the matter to court.

After the state repealed a ban on dry cannabis sales, nearly half of patients began opting for flower

Patient enrollment doubled from 2018 to 2019. 

Brady Cobb is CEO of SOL Global Investments Corp (OTC: SOLCF) and a partner at the Cobb Eddy law firm.

SOL's subsidiary dispensary One Plant opened in Boynton Beach in November, posting a week-over-week growth of 30% and increasing patient onboarding 26% week-over-week.

The state's changed position on dry flower provided a "massive jump start for the industry," Cobb said. 

Consumers have demanded improved flower quality across the state, he said. 

"All of the larger competitors have built large-scale grows that produce biomass for extraction or low-grade flower — much the same as Canadian LPs that are now struggling with oversupply and lack of smokable flower.”

Despite the quality concerns, flower sales have provided a boost to the market.

Trulieve CEO Kim Rivers said the company saw an "immediate uptick" in patients entering Florida's medical marijuana program, as well as a surge in patients who returned to their doctors to add flower to their medical recommendation. 

"Flower has been fairly consistent at approximately 50% of product sold," Rivers said.

The CEO expects a similar market surge from edibles. Trulieve and other producers are awaiting edible regulations from the state Department of Health.

Cannabis Execs: Edibles Regulations Move Slowly 

With edibles and dry flower concerns mostly in the rearview mirror, the state has other issues that could affect its cannabis market.

Both Rivers and Cobb said that while dry flower is being addressed, edibles remain a concern, as the rules for the products are coming out slowly. 

Cobb called edibles “the next legal fight” in Florida. 

The risk factors for Florida's marijuana market include the weather, said Beth Stavola, chief strategy officer and director at iAnthus Capital Holdings Inc (OTC: ITHUF).

“[Florida] has a unique environment that makes natural disasters like hurricanes a reality,” she said. 

In December, cannabis activists said lawmakers were failing to hear both sides of the argument concerning adult-use cannabis.

Pro-pot advocates said lawmakers too often focus on the negative aspects of cannabis without looking at its positives.

David Hasenauer is co-founder and CEO of the Fort Lauderdale-based hemp cultivator and processor Green Point Research.

The majority of licensees aren't doing their job, Hasenauer said. 

"They don’t operate dispensaries, and they don’t serve patients, [with] their only goal being that they want to flip a license,” he said. “We have been most disappointed to see protracted litigation by licensees who have had and still have no intent to perform.”

Signatures Submitted For Recreational Ballot Question

Much like other states, the maturation of Florida's market has led to adult use entering the conversation.

In November, advocacy group Make It Legal Florida exceeded the 76,632-signature threshold needed to warrant a review by the Florida Supreme Court. The state Supremes will now determine if legalization will make the 2020 ballot.

While the measure faces opposition, a late October poll showed 65% support from residents, according to the Miami New Times.  

Another initiative led by the group Regulate Florida surpassed the signature threshold in July.

Parallel is one cannabis company throwing significant support behind the movement, including a donation of $535,000 to Make It Legal’s efforts.

“Parallel supports Make it Legal Florida’s proposed constitutional amendment to expand access to cannabis for adults 21 and older,” Parallel COO Fisher told Benzinga. 

“Whether it is technically classified as medical or personal use, adults should have access to high-quality, legal cannabis to aid in their well-being.”

SOL's Cobb believes 2020's ballot will include the adult-use question. 

"The ballot initiatives will make the ballot, and I believe they will pass," he said. "Then, it’s time to see who can scale up to meet what will be a larger market in Florida as compared to all of Canada.”

Not everyone is certain that 2020 is the year.

"I think it is getting less and less likely that we will see it on the 2020 ballot, but I would not count out 2022," said Green Point Research's Hasenauer.

Most believe adult use is coming at some point.

“We believe recreational approval is a ‘when,’ not ‘if,’ in Florida," said Trulieve's Rivers.

The company is contemplating cultivation plans to support growth, inventory and additional store locations in advance of such a development, the CEO said. 

Related Links:

Report: Florida Cannabis Legalization Could Create 100K-Plus Jobs

How To Obtain A Medical Marijuana Card In Florida: A Guide For Cannabis Patients  

 

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