Trulieve Cannabis Corp: Florida’s Leading Medical Pot Company
Trulieve Cannabis Corp (OTCMKTS:TCNNF, CNSX:TRUL) is one of the brightest marijuana companies in an already overcrowded market. It’s the top revenue-producing cannabis stock, it reported record fourth-quarter results, and it is actually profitable (a rarity in the cannabis field).
And the future just got brighter for Trulieve. It’s the leading medical cannabis company in Florida, the state that just greenlighted the smoking of medical marijuana. Prior to this, medical marijuana could only legally be consumed in pill, oil, edible, or vape form.
Acquisitions in California and Massachusetts are also helping the company grow beyond the Sunshine State. This might explain why Trulieve Cannabis Corp stock is up 66% year-to-date and why the company expects full-year 2019 revenue to soar by approximately 110%.
Trulieve Cannabis Corp Overview
Trulieve isn’t the first name that comes to mind when investors think of the biggest revenue-generating cannabis firms. But that’s exactly what Trulieve is. Instead of focusing its efforts on the entire planet, Trulieve is a leader in an expanding niche market.
Trulieve was the first medical cannabis company to enter the Florida market. It also happens to be the leading company in that market, which is the third most populous state in the United States.
The company currently has over 150 different products and is constantly adding new ones. The company’s products include flower, cannabidiol (CBD), tinctures, capsules, and topical ointments. (Source: “Investors Overview,” Trulieve Cannabis Corp, last accessed April 16, 2019.)
Thanks to its first-mover advantage, the seed-to-sale cannabis firm has approximately 67% of the Florida medical marijuana market share and is responsible for selling between 60% and 80% of the state’s volume.
The company serves approximately 180,000 medical patients. But that number is growing rapidly, at a rate of approximately 10% month-over-month.
In January, Trulieve opened its 24th dispensary in Florida. In February, it signed an agreement with Colorado-based Love’s Oven, LLC to bring cannabis-infused edibles and concentrates to Florida. (Source: “Trulieve Announces Partnership to Bring Cannabis-Infused Edibles, Concentrates to Florida,” Cision, February 11, 2019.)
Back in November, Trulieve announced that it had acquired Massachusetts-based Life Essence, Inc. and California-based Leef Industries, LLC. These acquisitions represent Trulieve’s first operational foray outside of Florida. (Source: “Trulieve Completes Acquisition of Life Essence, Inc.,” Cision, December 13, 2018.)
Trulieve Cannabis Corp Stock
|Trulieve Cannabis Corp Stock Information|
|Market Cap||$1.5 billion|
|Shares Outstanding||109.8 million|
|50-Day Moving Average||$13.15|
|200-Day Moving Average||$11.26|
(Source: “Trulieve Cannabis Corp. (TCNNF),” Yahoo! Finance, last accessed April 9, 2019.)
Trulieve Cannabis Corp had the misfortune of going public just before the broader stock market sold off in October. This certainly didn’t bode well for TCNNF stock. On the other hand, the sell-off had nothing to do with Trulieve’s management or operations.
Trulieve Cannabis Corp stock rebounded nicely in early November after it reported strong third-quarter results, but it couldn’t sustain the momentum. Fortunately, saner minds have prevailed and Trulieve’s share price has been bullish since Wall Street ended its worst December since the Great Depression.
Chart courtesy of StockCharts.com
Trulieve Reports Record Q4 and 2018 Results
On April 10, Trulieve Cannabis Corp announced record financial results for the fourth quarter ended December 31, 2018.
Fourth-quarter revenue increased 172% year-over-year and 26.8% sequentially to $35.9 million. (Source: “Trulieve Reports Record Revenue for the Fourth Quarter and Full Year 2018,” Cision, April 10, 2019.)
The company’s fourth-quarter net income soared an eye-watering 3,467% to $10.7 million, from $300,000 in the same prior-year period.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 20.6% sequentially from $12.6 million to $15.2 million.
Full-year revenue increased 419% to $102.8 million. 2018 net income was up 1,094% year-over-year at $43.0 million, while adjusted EBITDA increased 44.4% to $45.6 million.
“In 2018, we focused on building a foundation to scale the business over the long-term and made significant progress on Trulieve’s core mission to create the preferred customer-centric brand in cannabis,” said CEO Kim Rivers. (Source: Ibid.)
In 2018, Trulieve began trading on the Canadian Securities Exchange and over-the-counter market, entered into agreements to acquire 100% of Life Essence and Leef Industries, and expanded its product line and the number of its Florida dispensaries. The company also opened a 55,000-square-foot processing facility that year.
Subsequent to the end of the fourth quarter, Trulieve won a lawsuit allowing it to increase the number of its dispensaries to 14 above the state cap.
In March 2019, it became legal to smoke medical marijuana in Florida.
Trulieve provided strong guidance for 2019, with full-year revenue expected to grow 108% to $214.0 million, with gross profits of $145.0 million (68% of revenue), and adjusted EBITDA of $92.0 million (43% of revenue).
What’s not to like about Trulieve Cannabis Corp stock?
The company has been reporting strong revenue and earnings growth, it has a strong stronghold in the Florida medical marijuana market, it’s opening new dispensaries, it announced new partnerships, it’s expanding into lucrative markets like California and Massachusetts, and it provided strong guidance for 2019.