(This story has been updated to include a quote from analyst Bethany Gomez of the Brightfield Group as well as Green Thumb’s stock price and to correct where Circle K is headquartered.)
The age of buying marijuana when you fill up your car has arrived in the United States – at least in Florida.
Green Thumb Industries, one of the biggest multistate operators in the U.S., signed an agreement with Circle K – one of the largest convenience-store chains in the world – that allows the cannabis company to lease space and open medical marijuana dispensaries adjacent to Circle K locations in Florida.
The Chicago-based cannabis company plans to start a “test and learn” rollout in 2023 with about 10 stores around the state, Green Thumb Industries (GTI) said in a Wednesday news release.
“This is a huge deal and, if successful, I think many will be looking to replicate this model as quickly as possible,” said Bethany Gomez, managing director at the Brightfield Group, a Chicago-based cannabis business analytics firm.
GTI, owner of the Rise Dispensaries chain, will brand it’s Florida stores as Rise Express.
Circle K, headquartered in Laval, Quebec, has more than 600 stores in Florida.
The Rise Express stores will sell flower, pre-rolls, vape cartridges and edibles.
“The opening of Rise Express stores at Circle K locations is a game-changer. Convenience is a strong channel in retail, and people want more access to cannabis,” GTI founder and CEO Ben Kovler said in a statement.
The products that will be sold at Rise Express stores will come from GTI’s 28-acre cultivation facility in Ocala, which is expected to be operational by the end of 2022.
There are more than 700,000 MMJ card holders in Florida, according to the state health department.
In that deal, Alimentation Couche-Tard, which owns about 20% of Fire and Flower, will open a cannabis retailer adjacent to its Circle K location in Brampton, Ontario.
That store will be operated under Fire & Flower’s Spark Perk’s brand.
In 2021, Canadian cannabis company Canopy Growth Corp. signed a deal with Circle K to sell its line of Whisl CBD vape cartridges through the convenience chain’s roughly 3,000 U.S. stores.
And this past May, Minnesota passed a groundbreaking state law allowing the sale of intoxicating hemp-derived THC edibles in mainstream retail outlets such as grocery and convenience stores.
But the law doesn’t permit marijuana sales.
Now that Circle K has broken the dam, can more deals between convenience stores and cannabis companies be expected?
Maddie Scanlon, senior insights analysts at Brightfield, noted that similar partnerships could indeed emerge in Florida, though it might be harder to replicate in other states – at least for now.
The main reasons GTI and Circle K were able to pull off this deal are Florida’s regulations and consumer habits, she said.
“Florida’s market is extremely unique in that the people with licenses can open an unlimited amount of dispensaries, given they have the proper approval from the area they want to put it in,” Scanlon said.
“With that system, it makes sense to put resources toward very small locations.”
She noted that multistate operator Trulieve Cannabis has roughly 120 stores in its home market.
A small-store model would be less likely to work in states with limited licenses because locations in such markets require customer volume to succeed, according to Scanlon.
“Markets that have limited licenses would not be able to replicate the same sort of thing,” she said.
Secondly, a recent Brightfield study showed that for 52% of cannabis consumers in Florida – more than any other state surveyed – location is the most important factor when they choose where to shop for medical marijuana.
By comparison, about 21% of cannabis consumers in California said location was the most important attribute when they picked a dispensary.
At the same time, Scanlon noted, GTI’s Rise chain has not done well in Florida, primarily because of a lack of brand awareness and sales.
Teaming up with Circle K could change that.
“Distinctly going for that location, convenience, I think will fare really well for them,” Scanlon said. “I think they’ll be one to watch now Florida.”
Green Thumb shares, traded on the over-the-counter markets as GTBIF, were up 3.6% late Wednesday.
Omar Sacirbey can be reached at firstname.lastname@example.org.