Cannabis & Hemp Stocks Investment Tools – Schedule Demo Now!


Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results

Many cannabis stocks have experienced all-time lows in 2020. Several marijuana companies were already trading significantly lower compared to their record highs and when the COVID-19 pandemic hit, these pot stocks continued to tank. However, there are a few exceptions such as Trulieve Cannabis – but is Trulieve a good stock to buy? Let’s dive into Trulieve’s latest Q3 financial results, from CEO Kim Rivers, to see what’s next for Trulieve cannabis.

Symbol Name Last Price Change % Change

The global cannabis industry is still in its infancy and continues to navigate through unique growing pains. Encombered by various regulations the rollout of retail stores in Canadian provinces has been slower than expected. This coupled with higher tax rates and a robust black market has resulted in languishing demand.

Trulieve Cannabis Algorithmic Stock Trading

Companies such as Aurora Cannabis are grappling with low-profit margins and massive write-downs over the last several months. However, there are also some cannabis companies that have been immune to the pandemic and continue to surge.

See our 3 top cannabis stock picks for 2020 here.

One such marijuana company is Trulieve Cannabis (OTC: TCNNF), whose stock has been on an absolute tear since it went public. While several pot stocks have lost over 80% in the last two years, shares of Trulieve Cannabis are up 60% since September 2018. But is Trulieve a good stock to buy?

Kim Rivers on Q3 Results

Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results

“Trulieve exceeded consensus for revenues and EBITDA again this quarter, achieving approximately $136 million in revenue representing a sequential quarter-over-quarter increase of 13%. Trulieve’s third quarter pro forma revenue increased the Pennsylvania acquisitions that closed last week with $154.9 million. Our adjusted EBITDA was $67.5 million or 50% in the third quarter. This is a 93% increase in revenues and an 83% increase in EBITDA on a year-over-year basis. We are proud of the industry-leading profitability performance.

As discussed last quarter, we are transitioning to GAAP by year end an area that has a significant difference between IFRS and GAAP as net income. Our net income on a GAAP basis would have been $17.4 million resulting in an impressive earnings per share of $0.15. I will also provide additional details around our Q2 results in the transition from IFRS to GAAP.

Before we get to that, I would like to highlight our hub model and spacing strategy as well as update metrics we traditionally report on. But first, I would like to touch on the election which is of course still top of mind for everyone.

Algorithmic Stock Trades Cannabis Stocks

Cannabis was a decisive winner on election night. All medical and east ballots passed in a clean sweep from the New Jersey as well as east ballot and the Northeast to Mississippi’s medical ballot in the south. The overwhelming support of these measures sent a signal to our political leaders in Washington that cannabis is not a person issue, but a human one. We are encouraged for brighter days ahead in the U.S. regarding the cannabis industry as we are actively preparing for what that might mean in the years to come.

See our 3 top cannabis stock picks for 2020 here.

One of the ways we are preparing is our hub expansion strategy which divides the country into five hubs or regions; Northeast, Southeast, Midwest, Northwest and Southwest. We will leverage the experience we have gained across the supply chain in these hubs, a process we have started in the Northeast. We have established our Northeast hub via acquisitions in Connecticut, Massachusetts, and most recently Pennsylvania.

Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results

As we have stated before, when we evaluate an acquisition opportunity, we focus on the culture of the potential target and whether it matches to Trulieve’s values. Our second focus is whether the acquisition will be accretive. Pennsylvania embodies both. With the closing of the Solevo and PurePenn acquisitions last week we are expanding our Northeast hub. PurePenn is a premier cultivation and production company and Solevo brings us three successful medical marijuana dispensaries in the Pittsburgh area.

These acquisitions are a game changer for our expansion plans as they create an immediate and significant presence in Pennsylvania, a large and growing market. Pennsylvania is the fifth most populated state in the U.S. with approximately 13 million people and an expanding medical marijuana patient base of approximately 380,000 patients as of September 30.

PurePenn and Solevo are proven and probable operators with strong management teams. Each company offer us deep ties and support within their communities. Their transactions offer state-of-the-art facilities, premium product portfolio, a strong and growing patient base and a statewide portfolio of customer base of a 100% of the 93dispensaries in Pennsylvania.

Algorithmic Stock Trades Cannabis Stocks

We are expanding our 35,000 square feet of cultivation to 90,000 square feet and the additional facilities are expected to come online by the end of Q1 2021. The expansion will allow Trulieve to meet demand in Pennsylvania, particularly with the potential for recreational use more likely now that New Jersey has passed a recreational initiative.

On the dispensary side, Solevo’s customer centric philosophy has been wonderful to see throughout the acquisition process. Solevo experienced healthy patient growth this quarter and had a customer retention rate of 83%, reflecting strong customer loyalty. Pennsylvania is a major milestone for Trulieve and we will continue to look for additional strategic growth opportunities and look forward to sharing more in Pennsylvania in future quarters.

Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results

I’ll now turn to Connecticut, where we began our Northeast hub operations. Connecticut was another successful transaction for us as it met the criteria I just described for customer centric values and profitability. Our Connecticut dispensary continues to hold market share and expanding market. Our Bristol store is now one of 18 open dispensaries in the state, yet maintains an outsized 10% market share and we are incredibly proud of our Connecticut team for their outperformance.

Another exiting state for us in the Northeast region is Massachusetts. Wholesale flower pricing remained strong in Massachusetts and given there is currently a significant flower shortage in the state we believe that this continues to be a great opportunity for Trulieve to bring high-quality products to the market.

Algorithmic Stock Trades Cannabis Stocks

Navigation of the regulatory environment has been a slow road, but we are currently in the inspection and approval phase of our first dispensary as well as our 140,000 square foot cultivation and production facility. After additional delays attributable to COVID shutdowns we are confident that we can get both approved and commence operations in the first half of 2021. We look forward to giving a more specific timing update on our Q4 call.

See our 3 top cannabis stock picks for 2020 here.

Another recent addition to our Northeast hub is West Virginia. This last week we announced that we had been awarded a processor permit. Approval as a medical cannabis licensee provides Trulieve with an opportunity to bring the Trulieve brand to patients through wholesale opportunities.

Trulieve Grows Across USA

Let’s now switch to the Southeast. Our home base in Florida is the cornerstone of our Southeast hub. As more southern states legalize and launch cannabis programs, we will look to expand. Trulieve is the undisputed leader in Florida. Our foundation of this success is our ability to quickly execute as demonstrated by having the first sale of medical marijuana, the first sale of flower and the first sale of edibles in the state.

Trulieve sold the first edible products in the state on September 2. We have been planning for edibles for a long, long time and the main directive for our team was to have a go-plan in place. Edibles regulations were released at the end of August and within a week Trulieve made its first sale of TruGels in our Tallahassee store to a long time patient and member of our treatment program. We only have one full month of data, so it is not enough to show a trend; however, with impressive sell-through rates I think we have a product that the market has clearly been waiting for.

We currently offer five flavors of TruGels, two varieties of TruChocolates, brownies and cookies from Love’s Oven, two varieties of Peruvian chocolate bars from Binske, and recently added TruNanoGels in three flavors. Our 10,000 square feet kitchen is cranking, working three shifts and we are already adding new equipment and lines to meet patient demand.

Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results

In addition to the launch of edibles, we have added other exciting products such as TruKief, a high THC product and CBN, launched with Blue River which is a naturally occurring cannabinoid that can aid sleep without [indiscernible] receptive to — of THC. We also launched our Cultivar collection, a line of premium quality strains with unique flavors and terpene profiles. The class collection will be rotational and available at select stores throughout Florida.

We’ve had wonderful feedback from our Trulieve community on these new additions. Our strength of execution has allowed us to achieve and maintain our consistent share of over 50% of the Florida market. Trulieve has got a powerful lead in the state and we have become the standard for patients for loyalty, trust, selection and quality. This is reflected in our ability to improve on already impressive market share. In October, we maintained a 51% share of dispensation for the oil and increased to 54% for flower and recently had a record breaking week in both categories.

Our performance continues to remain strong in the fourth quarter operating 22% of the dispensaries yet outperforming with approximately 52% of the market share. Third quarter patient growth in this state had approximately 62,400 [ph] new patients, just 300 patients shy of the entire patient count for the first half of the year. This is incredible growth.

Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results

We are seeing the patient growth come through in our store count and performance. Our expectations of $7 million to $8 million per dispensary on an annualized basis, are now nearing $10 million per dispensary.

During the quarter, we continued our unmatched pace of watching new stores opening 9 new dispensaries in Florida. This month we achieved our previously stated goal of 58 stores nationwide by year-end and yet there will be more to come. As a matter of fact, we are looking forward to opening the Lake City location in Florida tomorrow.

Let me take a moment now to update you on the key retail performance indicators we provide each quarter. Trulieve’s customer retention rate was approximately 79% in the third quarter, a sequential increase compared to 76% in the second quarter and 74% in the first quarter. For me this is quite meaningful as our focus on patient satisfaction translates to growing loyalty among our Trulievers.

Algorithmic Stock Trades Cannabis Stocks

We also track average basket size and number of units. For the third quarter patients visited in average of 2.9 times per month trending up from 2.7 times per month in Q2. Average basket size was $108 for the quarter. We expected basket sizes to normalize somewhat in the third quarter as there were macroeconomic drivers at play in Q2, such as COVID related buying, stimulus checks and tax refunds. In addition, we experienced a third-party testing bottleneck in Florida during the third quarter. Product availability caused some patients to have return visits skewing the visits higher and contributing to the lower baskets.

Another metric we track is same-store sales. For the 29 stores open for the entire days of third quarter 2020 they were also open for the fourth quarter and Q3 2019 with same-store sales increase of 19%. 15 of these stores were also open in Q3 2018. From our analytics and based on the velocity of store openings and how rapidly their output bring us, we see this as indicative of healthy overall growth. Consistently achieving impressive results is the product of our ability to expand and optimize our production facilities.

3 cannabis stocks to buy now

To support the continued patient growth I just outlined, and importantly key product [indiscernible] you need not only a large cultivation footprint, but also a deep expertise in supply chain management, logistics and product development, with a clear focus on efficiencies and optimization. These skills and scale will service well as regulator barriers shift and we execute our hub model.

As Trulieve continues to expand its cultivation footprint, we are not just adding more plants, we are making investments in our people, processes, and production to meet ever growing demand. During Q3 we had added 96,000 square feet of cultivation and another 24,000 square feet in October, which brings us to almost 1.9 million square feet with annual capacity of over 86,000 kg and we’re still building. We expect another 70,000 square feet to be added by year-end. We are doing this while remaining agile enough to pivot, responding to catalysts in the markets, such as the approval of new products or dealing with lives and third-party testing.

See our 3 top cannabis stock picks for 2020 here.

Third-party testing slowdowns were unique to Florida, so let me take just a moment to add some context here. As mentioned earlier, at the start of Q3 new testing regulations were implemented that require all sort of licensees to test products at certified laboratories as well as adding additional testing requirements.

Trulieve’s protocol since inception have included internal testing in our GMP certified lab, coupled with third-party testing, so this is nothing new for us. That was not true however for some of our competitors. When third-party testing was mandated, labs were immediately backlogged with products to test and the bottleneck it created impacted Trulieve’s product distribution. Let me just say the process is painful and had an impact on third quarter revenue. At one point, to put it in perspective, we had close to 600,000 units hung up in testing.

Algorithmic Stock Trades Cannabis Stocks

We worked with our labs and changes some internal processes and as we entered the fourth quarter we see improvement in the testing turnaround times as evidenced by our record-setting week discussed earlier. I am very proud of our performance this quarter, not only in light of COVID, but despite it. The double-digit revenue growth performance and even more remarkable considering it is building on the 26% increase to our revenue base generated in Q2.

The leadership team that we have in Florida and the difference between us and our nearest competitor is unlike any other market in the country and the transformational path we are on for strategic expansion as we execute on our Northeast and Southeast hubs is exciting.”

Trulieve Cannabis CEO Kim Rivers on Q3 2020 Results


About Cannin: Your Cannabis Stocks Resource

Cannin Investment Group: Your Hemp Stocks ExpertsCannin is your #1 trusted resource for cannabis stocks. Our global team of experts evaluates all emerging cannabis stock investing opportunities. We aggregate hundreds of hours of financial research and provide tips on the best cannabis stocks for 2020. 

Use Cannin as your resource for:

Market analysts expect the marijuana and hemp industry will have an annual value exceeding $75 Billion in the next decade. Is it too late to invest in marijuana stocks? No! This is the perfect time to invest.

Are you looking to buy stock in hemp companies or marijuana companies for 2020? Interested in new penny hemp stock companies? Looking for the best Canadian cannabis stocks to invest in? Looking to leverage the power of algorithmic stock trading to beat the cannabis market? We can help.

Are you interested in cannabis stocks like Curaleaf, Trulieve, Aurora Cannabis, Charlotte’s Web, Canopy Growth, or Hemp Inc.?

Predict price movements of cannabis stocks several hours in advance with our proprietary algorithmic stock trading software.

  • +25% Gains in 2020
  • +49.8% Gains in 2019
  • Backtested since 2012

We’re so confident you’ll love our algotrading cannabis stock signals, we’re willing to give you a one-month risk-free trial to see it for yourself.

Profit from the best cannabis stocks – we’ll show you how at cannin.com.

Marijuana Stocks, Pot Stocks, Algorithmic Stock Trading, Hemp stocks