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How Trulieve Knocked It Out of the Park With Its Q4 Results

By Keith Speights - Mar 23, 2021 at 11:00AM

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The multistate cannabis operator still largely relied on one state for its success.

Trulieve Cannabis (TCNNF -0.92%) isn't the biggest multistate operator (MSO) in the U.S. marijuana industry. However, it's been the best so far this year in terms of stock performance. Trulieve's shares have skyrocketed 57%.

That gain came prior to the company announcing its fourth-quarter results before the market opened on Tuesday. The momentum for the marijuana stock seems likely to continue, with Trulieve's share price rising a little in early trading. Here are the highlights from the MSO's Q4 update.

A marijuana leaf.

Image source: Getty Images.

By the numbers

Trulieve reported revenue of $168.4 million in Q4, up 111% year over year and 24% quarter over quarter. This result easily topped the average analyst's revenue 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 in the prior-year period. The consensus analyst estimate projected Q4 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 represented 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 off our highest annual revenue, net income and Adjusted EBITDA year to date." She also noted that the company's adjusted EBITDA for full-year 2020 was nearly as great as its revenue in 2019.

One major reason for Trulieve's impressive Q4 performance was its continued dominance in Florida's medical marijuana market. At the end of 2020, Trulieve claimed a market share of 53% 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 retail cannabis stores in Florida. It closed out 2020 with 75 stores across the U.S. The MSO also entered its two new states after winning a medical cannabis license in West Virginia and completing the acquisitions of two Pennsylvania marijuana companies.

Looking ahead

Trulieve is aiming for for an even bigger year in 2021. The company expects revenue will be between $815 million and $850 million. The midpoint of that range reflects a year-over-year increase of nearly 60%.

Rivers specifically noted "the political changes and heightened focus on 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 building out its "hub strategy throughout the U.S. in preparation for the expected accelerated adoption of cannabis in the U.S."

That "accelerated adoption of cannabis" mentioned by Rivers appears to be well underway. New Jersey recently legalized recreational marijuana. New York appears to be on the path to doing so as well. 

There's also a real chance of meaningful cannabis reform at the federal level in the U.S. Curaleaf Executive Chairman Boris Jordan recently told Bloomberg that he thinks changes are coming soon that will pave the way for U.S. cannabis companies to list on major U.S. stock exchanges. He predicted that Curaleaf could be able to list its shares on a major U.S. stock exchange either later this year or in 2022.

Whether Jordan's prediction comes true or not, Trulieve should be set for yet another tremendous performance in 2021.

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