Trulieve Cannabis Q3 Financials Were Down But Stock Price Jumps

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), a constituent in the munKNEE American Cannabis MSO Stocks Index, announced its results for the quarter ended September 30, 2022 late last week, as follows:


Third Quarter 2022 Financial Highlights

(The information below compares Q3 2022 with Q2 2022 and all figures are in U.S. dollars.)

  • Revenue: DOWN 5.6%
  • Gross Profit: DOWN 8.7%
    • Gross Profit Margin: DOWN to 56% from 58%
  • Net Income (Loss): DOWN to $(115)M from $(22)M
    • Adj. Net Income (Loss): UP to $4M from $(1)M (excludes $26 million of transaction, acquisition, integration, and other non-recurring charges and $93 million in asset impairments, disposals and discontinued operations
  • Adj. EBITDA: DOWN 10.8% to $99M
    • Adj. EBITDA Margin: DOWN to 33% from 35%
  • Cash on Hand: $114M


Third Quarter Operational Highlights

  • Invested $38 million in capital expenditures which should decline significantly in 2023 following a multi-year investment cycle to support future growth.
  • Expanded market leading retail positions in Arizona, Florida, and West Virginia, with 11 new dispensary openings.
  • Increased utilization at new indoor 750K square foot cultivation facility in Florida.
  • Commenced cultivation operations in Georgia to support production of low THC oil products for retail launch in early 2023.
  • Rolled out customer data platform in Arizona and Pennsylvania while deepening capabilities in Florida.
  • Contributed to the Smart and Safe Florida campaign, which aims to legalize adult use marijuana in Florida through a ballot initiative in November 2024.


Management Commentary

Kim Rivers, Trulieve CEO, said: 

  • "Many states have yet to implement medical or adult use cannabis programs and there is a growing appetite for substantive federal reform. Trulieve has been preparing for this next phase of industry evolution for years,
    • building our regional hub strategy,
    • scaling cutting-edge cultivation and manufacturing capacity,
    • expanding our leading retail platform,
    • investing in data technology
    • and perfecting the customer journey."


Outlook

Based on our performance year to date and current trends, we are targeting:

  • the low end of 2022 guidance of $1.25 billion to $1.3 billion in revenue
  • and $415 million to $450 million in Adjusted EBITDA.


Stock Performance

Trulieve's stock price declined 26% during Q3 (July, August, and September), but had advanced 27% as of the end of October. The stock price had advanced a further 6% leading up to the release of the Q3 financials after the markets closed on November 9th and then advanced another 9% as of the close of business yesterday. Despite the encouraging advancement in stock price the stock is down 52% YTD.


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