Trulieve Cannabis Corp: One of the Best-Performing Pot Stocks Bullish Ahead of Q3 Results

Trulieve Cannabis Corp Top Pot Stock Bullish Ahead of Q3 Earnings
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Trulieve Cannabis Corp Up 27% Since Start of October

Some of the most recognizable stocks in the cannabis space have seen their shares sell off in 2019. On the other hand, some of the best-performing pot stocks in 2019 are those not hogging the limelight. Case in point: Trulieve Cannabis Corp (OTCMKTS:TCNNF, CNSX:TRUL).

Trulieve stock is up about 29% since the start of 2019 and was one of the best-performing cannabis stocks in October, rising about 24% in that month.

A leader in the Florida medical marijuana market, Trulieve Cannabis reported strong second-quarter revenue growth and profitability, as well as a strong outlook. The company has been expanding its footprint, has been opening new dispensaries, and is on track to expand to six U.S. states by the end of the year.

TCNNF stock continues to have excellent momentum in the lead-up to announcing its third-quarter financial results after the markets close on November 18.

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Trulieve Stock Overview

Quincy, Florida-based Trulieve Cannabis Corp is a seed-to-sale pot company that produces and sells its own products. As the first and leading medical cannabis company in the Sunshine State, Trulieve operates 39 dispensaries, covering 55% of the Florida market. (Source: “Overview,” Trulieve Cannabis Corp, last accessed November 6, 2019.)

Trulieve is on track to have 44 dispensaries open by the end of 2019. The company is a first mover in Florida, the third most populous state in the country, and is expanding outside of the state. It already operates in California and Massachusetts.

This should help the company’s patient base, which already grows approximately 10% month-to-month, grow even more quickly.

Florida’s Office of Medical Marijuana Use recently announced that the registry had topped 277,000 registered medical marijuana patients with an active ID card. Trulieve consistently sells more than half of the state’s overall volume (Source: “Trulieve to Open New Dispensary in Panama City Beach, 38th in Florida,” Trulieve Cannabis Corp, October 29, 2019.)

At Trulieve’s dispensaries, customers can peruse the company’s more than 240 stock keeping units (SKUs), including flower, cannabidiol (CBD), concentrates, topicals, tinctures, capsules, nasal spray, clothing, and accessories.

TCNNF Stock Information

Market Cap $1.2 Billion
52-Week Change -20.7%
52-Week High $16.23
52-Week Low $6.68
Shares Outstanding 32.2 Million
Float 32.7 Million
50-Day Moving Average $9.47
200-Day Moving Average $10.33

(Source: “Trulieve Cannabis Corp. (TCNNF),” Yahoo! Finance, last accessed November 6, 2019.)

Trulieve Opens 38th & 39th Dispensaries

On October 30, Trulieve opened the doors of its 38th Florida dispensary, in Panama City Beach. (Source: Trulieve Cannabis Corp, October 29, 2019, op. cit.)

Then, on November 6, the company opened the doors to its 39th dispensary in the state, in Wesley Chapel. (Source: “Trulieve Expands Patient Access in Central Florida, Opens Record 39th Storefront,” Trulieve Cannabis Corp, November 6, 2019.)

Trulieve Announces Pricing of Public Offering

On October 30, Trulieve announced the pricing of its previously announced public offering. The offering has an aggregate principal amount of $60.0 million, with gross proceeds of $61.1 million. (Source: “Trulieve Announces Pricing of Public Offering,” Cision, October 30, 2019.)

The company said it will use the net proceeds of the public offering for acquisitions, capital expenditures,  and general corporate purposes.

Record Q2 Revenue & Profits

On August 14, Trulieve announced that its second-quarter revenue, for the period ended June 30, jumped 149% year-over-year and 30% quarter-over-quarter to a record $57.9 million. Second-quarter net income was $57.5 million. (Source: “Trulieve Reports Strong Operational Results, Record Revenue and Profits, and Grows Footprint in the Second Quarter of 2019,” Trulieve Cannabis Corp, August 14, 2019.)

Trulieve reaffirmed its full-year guidance for 2019, with revenue in the range of $220.0 to $240.0 million. That represents year-over-year midpoint growth of 124%. Revenue for 2020 is expected to be in the range of $380.0 to $400.0 million.

During the second quarter, Trulieve:

  • Increased its Florida patient growth 19% to over 181,000
  • Completed a public debt offering, raising $70.0 million
  • Opened three dispensaries, bringing the total to 29
  • Completed acquisition of The Healing Corner, a medical cannabis dispensary in Connecticut

(Source: “Trulieve Reports Strong Operational Results, Record Revenue and Profits, and Grows Footprint in the Second Quarter of 2019,” Cision, August 14, 2019.)

Analyst Take

As the leading provider of medical marijuana in Florida, Trulieve Cannabis Corp has first-mover advantage with the state’s growing number of cannabis users. The company has strong brand recognition, a record number of dispensaries, and dedicated group of patients that are not afraid to be known as “Trulievers.”

Thanks to the company’s strong balance sheet, financial performance, market trends, and expansion efforts, management said it expects its “efforts to translate to new strong results throughout the remainder of 2019.”

That should bode well for Trulieve stock.