Trulieve Cannabis Corp: This Pot Stock Is a Profit Machine

Trulieve stockA Top Pick for Pot Stock Investors?

Among the pot stocks trading in today’s market, Trulieve Cannabis Corp (CNSX:TRUL, OTCMKTS:TCNNF) is one of the top names worth considering.

Trulieve stock is certainly one of my favorite pot stocks, for a very simple reason: over time, the stock has presented plenty of massive profit opportunities.

Last July, I wrote a piece explaining why Trulieve Cannabis Corp “could deliver big returns.” At the time, TCNNF stock was trading around $12.50 per share.

By December, Trulieve stock had more than doubled since July to more than $30.00 per share. And that’s when I told Profit Confidential readers why “higher highs could be within reach for TCNNF stock.”

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Today, Trulieve stock trades around $45.00 per share, meaning it has gone up by about 260% since my July 2020 article. And even for investors who got in after my December 2020 story, the return would be a solid 50%.

The best part is, the opportunity might not be over yet; TCNNF stock remains one of the best plays in the entire cannabis industry.

Trulieve Cannabis Corp’s story began in 2015 when the company won the first medical marijuana application in Florida. The company opened its first dispensary in 2016 and has grown into the leading medical cannabis company in the Sunshine State. Today, Trulieve has 1.9 million square feet of cultivation capacity and 78 retail locations in Florida, plus a statewide delivery program.

It’s estimated that Trulieve has about a 52% share of Florida’s medical cannabis market. The company has also expanded its presence to California, Massachusetts, Connecticut, Pennsylvania, and West Virginia. (Source: “Investor Presentation: January 2021,” Trulieve Cannabis Corp, last accessed April 1, 2021.)

Mind you, Trulieve stock is a top pot stock not just because of the company’s early-mover advantage or dominant market position. The company has differentiated itself from its peers because it’s profitable, and it has been for some time.

According to the company’s latest earnings report, Trulieve generated net income of $3.0 million in the fourth quarter of 2020. The amount might not seem substantial on its own, but it marked the company’s 12th consecutive quarter of profitability. (Source: “Trulieve Reports Fourth Quarter and Full-Year 2020 Results and Announces Full-Year 2021 Guidance,” Trulieve Cannabis Corp, March 23, 2021.)

That’s right, when many legal marijuana companies have been incurring losses quarter after quarter, Trulieve finished its third straight year of profitability.

The business has been growing, too. In the fourth quarter of 2020, the company generated $168.4 million of total revenue, which represented a whopping 111% increase year-over-year and a 24% increase quarter-over-quarter.

Trulieve’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $78.2 million for the quarter, up 79% year-over-year and 19% sequentially.

In full-year 2020, Trulieve Cannabis Corp earned $521.5 million of total revenue. The amount not only more than doubled the $252.8 million it earned in 2019, but also marked an all-time high for the company. At the same time, the company grew its adjusted EBITDA by 99% from 2019 to $251.0 million.

At the bottom line, Trulieve earned net income of $63.0 million, or $0.53 per share, in 2020. If you exclude the revaluation of the company’s debt warrants—an impact of $42.7 million for the year—Trulieve earned adjusted net income of $105.7 million in 2020, which translates to adjusted earnings of $0.89 per share.

And this could be just the beginning, as Trulieve Cannabis Corp plans to achieve a lot more this year.

In particular, management expects the company to generate $815.0 to $850.0 million of revenue in full-year 2021. This projection takes into account a full year of operations from Trulieve’s Pennsylvania facilities, as well as continued growth in its Florida, Massachusetts, Connecticut, and California locations.

Meanwhile, Trulieve Cannabis Corp’s adjusted EBITDA is expected to be between $355.0 and $375.0 million in 2021.

To put things in perspective, the midpoint of that guidance range would imply a 59.6% growth in revenue and a 45.4% increase in adjusted EBITDA this year.

Don’t forget, the regulatory environment is also evolving. In a conference call on March 23, Trulieve’s chief executive officer, Kim Rivers, said,

On the political front, the tide is starting to turn regarding cannabis policy at the federal level. Although we can’t predict how and when meaningful change will happen, we are encouraged by the opportunities ahead. With the SAFE Banking Act being reintroduced in the House last week and now being introduced to the Senate this week, we believe we will see movement this year and are keeping a close eye on developments, but are not losing sight of our current operating framework and strategic plans.

(Source: “Trulieve Cannabis Corp. (TCNNF) CEO Kim Rivers on Q4 2020 Results – Earnings Call Transcript,” Seeking Alpha, March 23, 2021.)

Trulieve Cannabis Corp (OCTMKTS:TCNNF) Stock Chart

Chart courtesy of StockCharts.com

Analyst Take

Keep in mind, if a stock goes on a massive rally in a short period, it tends to experience some pullbacks. Looking at the Trulieve stock chart, there has indeed been some retracement in recent weeks.

That said, the outlook for Trulieve Cannabis Corp is as bright as ever. And in my opinion, the company is well positioned to become one of the long-term winners in the U.S. cannabis industry.