3 Takeaways From Trulieve’s Earnings Report

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.

1. 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
2. As of March 31^st, 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
3. 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 support@technical420.com with the subject “Trulieve” to be added to our distribution list.

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This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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