Last week, Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) reported earnings for the first quarter and received a negative response from the market.
So far, 2023 has proven to be a tough year for the United States (US) multi-state operator (MSO) and the stock has lost more than a third of its value (based on market capitalization). The downtrend accelerated after Trulieve’s earnings report and we have highlighted 3 important takeaways from it.
- During the quarter, Trulieve reported a $64 million net loss on $289 million of revenue. When compared to the same period last year, the net loss doubled while revenue fell by $29 million. Although the company reported $78 million of adjusted EBITDA, we find the year-over-year changes to be significant
- As of March 31st, the US cannabis company reported to have $195 million of cash on hand. We will monitor how the management team deploys capital to capture additional market share in the US. In the earnings report, CEO Kim Rivers said the team is laser focused on cash preservation and generation as the company prepares for the next phase of accelerated growth
- During the last year, Trulieve has entered new markets via acquisitions and we expect this trend to continue. By the end of the quarter, the company had operations in 11 states, with 32% of retail locations outside of Florida. Going forward, we expect Florida to represent a smaller percentage of the company’s total revenue and believe this is good for the business.
From Georgia to Connecticut, Trulieve has been executing on a multi-state expansion and we will monitor how the business evolves from here. Currently, the company operates 186 retail dispensaries and has over 4 million square feet of cultivation and processing capacity in the US. With this type of scale, Trulieve is one of the biggest cannabis operators in the US and we expect the business to survive the weak trend in the sector.
If you are interested in learning more about Trulieve, please send an email to firstname.lastname@example.org with the subject “Trulieve” to be added to our distribution list.
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