Florida’s medical marijuana market is often described by industry watchers as an oligopoly – dominated by a few vertically integrated operators.
But it isn’t.
The reality is that the roughly half-billion-dollar market is dominated by one player – Florida-based Trulieve, which is capturing nearly 50% of all sales.
No other company comes close.
Experts say that Trulieve’s dominance shows how critical it can be to get an early, strong foothold into a market even when, in Florida’s case, smokable flower sales only recently were allowed.
The phenomenon also speaks to how telling per-store sales are and raises the question of whether such financial transparency is being conveyed to cannabis investors today as much as it should be, said Andrew Livingston, director of economics and research at Denver-based cannabis law firm Vicente Sederberg.
Trulieve’s Florida dominance doesn’t come from the fact that it is tied for tops in the number of dispensaries – although that clearly helps – but instead from a staggering sales-per-store average, according to an analysis of weekly state MMJ reports by Vicente Sederberg.
The market dynamic has largely continued in the six months since the state lifted a ban on smokable flower in March.
Trulieve was the first out of the gate with smokable flower and controls nearly half the booming flower market, which already is generating roughly $4 million a week in sales, making it a $200-million-plus industry itself.
“They’re dominating. There’s no doubt about it,” said Jeffrey Sharkey, executive director of the Medical Marijuana Business Association of Florida, an industry group.
“Yes, they absolutely have the market share right now,” concurred Sally Peebles, a Florida cannabis attorney and partner in the Vicente Sederberg law firm.
Peebles, who also serves as vice chair of the state of Florida medical marijuana advisory board, attributes Trulieve’s success to an early and aggressive retail strategy – and excellent marketing.
Kim Rivers, Trulieve CEO, also attributed the company’s success in part to a “first-mover advantage.”
“We have aggressively built out our network of dispensaries from the Panhandle to Key West to be in communities throughout our large and dispersed state,” she wrote in an email to Marijuana Business Daily.
Marijuana Business Factbook 2019 projects that Florida medical cannabis sales will hit $425 million-$525 million this year, up from $225 million-$300 million in 2018.
If so, that could put Trulieve’s sales at $200 million-$250 million for the year.
Trulieve and Surterra Wellness lead the state with 31 dispensaries each as of Sept. 6, according to state figures. Curaleaf has 26.
There are 162 dispensaries statewide – a tripling in the past year alone.
In other words, Trulieve has nearly a 50% share of medical cannabis sales despite operating fewer than 20% of the state’s dispensaries.
Taylor Biehl, legislative programs director for the Capitol Alliance Group in Tallahassee and co-founder of the Medical Marijuana Business Association of Florida, said that before the state Supreme Court decides, the Legislature still has the ability to act.
Lawmakers, he said, could craft their own language that would allow for a “reasonable number” of stand-alone cultivation, processing and dispensary licenses.
Sharkey said the industry association favors such an approach.
“There’s a lot of pressure for additional licenses and a lot of pressure for keeping the market manageable,” Sharkey said. “We don’t want to end up being Oregon or Washington” with a cannabis glut.
“But there’s still room to grow,” he noted. “Demand is still significant in Florida.”
As more players enter the space, it stands to reason that Trulieve will lose some of its dominance.
“The laws of statistics would suggest their percentage of sales will decrease,” Sharkey said. “How much, it’s hard to say.”
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