Trulieve Has a Strong Structure to Grow in the Cannabis Market
The Florida cannabis producer has been recording steady growth, and last week, the shares peaked at $33.61.
Curated by Sechat, with information from Investing.com
At first glance, it may sound repetitive to say that all companies in the cannabis industry are awaiting federal legislation in the U.S. that will legalize marijuana. But this is the only point of interest when we talk about this market. Many things depend on it. And the fate of many companies will be determined by their performance as soon as this megamarket opens.
That’s why so many investors are paying close attention to how these companies are positioned to take advantage of this unique opportunity when it arises. And the clock is ticking louder as this eventuality approaches.
One company that seems well-prepared is Trulieve (OTC:TCNNF) (CSE:TRUL). The Florida cannabis producer has been recording steady growth and has a solid corporate structure.
>>> Join the Sechat group on WHATSAPP and receive news first
Trulieve daily
Trulieve's shares peaked after the release of its latest earnings report last week, reaching a value of $33.61. However, since then, they have pulled back slightly, closing yesterday at $27.40, a drop of 5.5% on the day.
Nevertheless, over the past year, the stock has accumulated a gain of more than 16.5%. It’s an impressive measure in a challenging market that may see big winners in the future.
Below, we present the factors that put Trulieve in a favorable position:
>>> Join the Sechat group on TELEGRAM and receive news first
First, let’s analyze its growth.
Last week, the company revealed its latest quarterly earnings, which showed a 64% year-over-year increase in revenue. This figure is now $224.1 million, exceeding analysts' expectations.
Its gross profit also rose significantly, jumping 68.7% to $153.9 million in the last quarter ending September 30. This is an increase from the $102.2 million recorded in the same period last year.
>>> Subscribe to our NEWSLETTER and receive reliable information from Sechat about Medical Cannabis
Its profit also saw a nice jump, up 7% to $18.6 million in the quarter, despite a one-time cost of $16.4 million.
Now, let’s take a look at the company’s structure.
It is one of the few vertically integrated cannabis companies in the U.S., meaning it controls the entire process from cultivation to marketing. It is also a multi-stage operator. This has allowed the company to grow steadily where it can operate. And it has been performing well in this regard. Today, it is the largest cannabis retailer in the U.S.
Trulieve has diversified its business from its origins as a medical marijuana company and has ventured into the recreational market, where it holds a leadership role.
It is also expanding in other ways. Last month, it completed its $2.1 billion acquisition of Harvest Health & Recreation, a medical marijuana company. This is where the recent and one-time depreciation of its assets of $16.4 million comes from.
But the new acquisition is already growing. In the last quarter, Trulieve opened 13 new dispensaries under the Harvest banner. Together, they operate 155 stores and 3.5 million square feet of cultivation space.
Vertical integration, as seen with the largest Canadian operators, allows Trulieve to be in a better position to fully capitalize on the opportunity to expand its business when federal legalization occurs in the U.S. It will be able to control its inventory and expand its retail operations.