Trulieve Cannabis (OTC: TCNNF) is not the largest multi-state operator (MSO) in the US marijuana industry. However, it has been the best so far this year in terms of stock market performance. Shares of Trulieve climbed 57%.
The gain came before the company announced its fourth quarter results before the market opened on Tuesday. Momentum for the marijuana stock looks likely to continue, with Trulieve’s share price rising somewhat early in the trading day. Here are the highlights from MSO’s fourth quarter update.
By the numbers
Trulieve reported fourth quarter revenue of $ 168.4 million, up 111% year over year and 24% quarter over quarter. That result easily exceeded the analyst’s average earnings estimate of $ 162 million.
The company posted net income of $ 3 million, or $ 0.38 per share, based on generally accepted accounting principles (GAAP), down from $ 12.2 million last year. The analyst consensus estimate was for fourth quarter earnings of $ 0.22 per share.
Trulieve reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $ 78.2 million. The company’s adjusted EBITDA was a 79% year-over-year jump and a 19% quarter-over-quarter increase.
Behind the numbers
Trulieve CEO Kim Rivers said: “We had an excellent fourth quarter with strong financial performance, capping our highest year-to-date revenue, net income and adjusted EBITDA. . She also noted that the company’s adjusted EBITDA for the year 2020 was almost as high as its revenue in 2019.
One of the main reasons for Trulieve’s impressive fourth quarter performance was its continued dominance of the medical marijuana market in Florida. At the end of 2020, Trulieve claimed a 53% market share in cannabis flower and a 49% market share in cannabis oil in the Sunshine State.
The company also continued to expand. In the fourth quarter, Trulieve opened 11 new cannabis retail stores in Florida. It closed 2020 with 75 stores across the United States. The MSO also entered its two new states after obtaining a medical cannabis license in West Virginia and finalizing the acquisitions of two marijuana companies in Pennsylvania.
Trulieve is aiming for an even bigger year in 2021. The company expects revenue to be between $ 815 million and $ 850 million. The midpoint of this range reflects a year-over-year increase of almost 60%.
Rivers specifically noted “political changes and increased attention to cannabis in the country” as factors that should help position Trulieve for a strong performance this year. She added that the company plans to continue to develop its “hub strategy across the United States for the expected accelerated adoption of cannabis in the United States.”
This “accelerated adoption of cannabis” referred to by Rivers seems well underway. New Jersey recently legalized recreational marijuana. New York appears to be on the right track to do so as well.
There is also a real chance of meaningful cannabis reform at the federal level in the United States. Curaleaf Executive Chairman Boris Jordan recently told Bloomberg he believes changes will come soon that pave the way for U.S. cannabis companies to list on major U.S. stock exchanges. He predicted that Curaleaf might be able to list its shares on a major US stock exchange either later this year or in 2022.
Whether or not Jordan’s prediction comes true, Trulieve should be set for another formidable performance in 2021.
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