2 Market Leaders Cashing in on Florida’s Cannabis Program

Florida has emerged as the fastest-growing medical cannabis market in the country.

Florida legalized medical cannabis in 2016 – since then, the state’s medical program has been booming.

According to a report from CBS Miami, the number of medical cannabis patients in Florida has more than doubled in the last year, growing from less than 200,000 to more than 400,000.

The surging demand has led to cannabis shortages. Here are some more details from Fox4 Now.

“There’s not enough product and not enough supply with a super high demand. Therefore, there’s a big challenge there,” said Nick Garulay with My Florida Green in Naples.

Smokable medical marijuana became legal in Florida back in March. “And I don’t think the dispensaries were very prepared,” said Garulay. Garulay said there are more than 300,000 qualified patients but there aren’t enough dispensaries in Florida.

Looking forward, leading market-research firms are predicting Florida’s cannabis market will continue to expand.

I expect the medical cannabis program to continue expanding – and Florida still hasn’t legalized recreational cannabis. If that happens, and I expect it to in the next 24 months, it would potentially add billions to annual cannabis sales.

These are the reasons why a leading market research firm Statista is predicting huge growth in the next five years.

The success of Florida’s cannabis industry is creating a handful of opportunities that cannabis investors need to know about.

I see two early industry leaders in position to capitalize.

#1 – Trulieve Cannabis Corp (CSE: TRUL, OTC: TCNNF)

Trulieve Cannabis Corp (CSE: TRUL, OTC: TCNNF) is the clear market leader in Florida.

Trulieve has an impressive portfolio of cannabis assets in the state.

It owns 1.7 million square feet of cultivation centers in Florida and operates 35 medical dispensaries – more than any other company in the state.

These assets help Trulieve sell more cannabis than any other player in the state – by a long shot. You can see that in the chart from mjbizdaily.com.

Florida's Top 10 Cannabis Operators

This impressive portfolio of assets is helping Trulieve deliver some of the best growth numbers in the entire US cannabis industry.

Trulieve recently reported third-quarter results that included record revenue of $70 million and sales growth of 22% from the same period last year.

Despite the impressive results and promising outlook, Trulieve looks under appreciated by the Street. Its price-to-sales ratio of 7 is a sharp discount to its US peers and an ever sharper discount to the Canadian cannabis stocks.

This has led to a good year for Trulieve on the chart – while other cannabis stocks have struggled Trulieve is up 38% in 2019.

#2 – Liberty Health Sciences (CSE: LHS, OTC: LHSIF)

Liberty Health Sciences (CSE: LHS, OTC: LHSIF) is another big player in Florida – you can see in the chart above. Behind Trulieve, Liberty is selling the second-highest volume of smokable cannabis in Florida.

Liberty owns and operates 21 medical cannabis dispensaries in Florida. And with Florida’s medical cannabis industry flourishing, Liberty has been delivering impressive sales growth.

Second-quarter sales were up more than 400% from the same period last year, climbing to $10.6 million. That puts Liberty on track to do more than $50 million in revenue in the next 12 months.

Looking forward Liberty should continue growing – the company has been investing tens of millions to expand cultivation and add new dispensary locations. Here are some more details directly from the press release.

  • The Company has lease agreements in place for another 10 locations and is further negotiating another seven.
  • Liberty finished construction on its new 387-acre state-of-the-art Liberty-360 facility comprising of 300,000 square feet of greenhouse processing and production space resulting in the Company being the lowest cost and consistent producer in Florida.

Despite the solid quarterly results and promising outlook, Liberty shares have struggled this year with the broader cannabis sector.

However, I see evidence on the chart that shares are forming a long-term bottom between $0.28 and $0.35. I am expecting shares to rebound from this area and begin trending higher.

Chart of Liberty Health Science

The Big Picture on Florida and these Two Early Industry Leaders

Florida has one of the fastest-growing medical cannabis markets in the country. Looking forward, the market should keep expanding at a rapid pace as more patients join the medical program and Florida looks at legalizing recreational cannabis.

Trulieve and Liberty are two early leaders in Florida that are in position to capitalize.

Michael Vodicka owns shares of Trulieve (TCNNF).

About the Author

Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.