There's an undisputed 800-pound gorilla in the Florida medical cannabis market. Trulieve Cannabis (TCNNF 2.54%) absolutely dominates in its home state. But the company is working hard to establish itself as a bona fide multi-state operator. Its planned acquisition of Harvest Health & Recreation (HRVSF) will be a huge step in achieving that goal.

In the meantime, the U.S. cannabis operator is showing that it can continue to grow in Florida. Trulieve announced its first-quarter results before the market opened on Thursday. Here are the highlights from the company's Q1 update.

Cannabis leaf on top of a stack of $100 bills

Image source: Getty Images.

By the numbers

Trulieve reported revenue in the first quarter of $193.8 million, a 102% year-over-year jump and a 15% quarter-over-quarter increase. This result beat the average analysts' revenue estimate of $189.86 million.

The company announced Q1 net income of $30.1 million based on generally accepted accounting principles (GAAP). In the prior-year period, Trulieve posted GAAP earnings of $23.6 million.

Trulieve generated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter of $90.8 million. This figure reflected an 87% year-over-year increase.

The company also continued its streak of delivering positive cash flow with $60.4 million in cash flows from operations. Trulieve's operating cash flow in the prior year period totaled $23.9 million.

Behind the numbers

Trulieve's strong revenue growth stemmed primarily from its continued expansion in Florida. Since the end of the first quarter of 2020, the company has opened 33 medical cannabis dispensaries in the state, including eight new locations opened in the first quarter of 2021. Trulieve now has 82 stores.

However, Trulieve does have a presence in other states. The company reported its first full quarter of operations in Pennsylvania. Its acquisitions of PurePenn and Solovo Wellness in November 2020 gave it marijuana cultivation and manufacturing facilities plus three medical marijuana dispensaries in the Pittsburgh area.

The company also operates a dispensary in Palm Springs, California, that serves medical and adult-use cannabis customers. In addition, Trulieve owns a medical cannabis dispensary in Connecticut.

Probably the only negative for Trulieve in Q1 was that its gross margin decreased to 70% from 77% in the prior-year period. The company attributed this decline to its expansion into new markets, the timing of its inventory flowthrough, and a changing product mix.

Looking ahead

The biggest thing to look forward to with Trulieve is, without question, the company's purchase of Harvest. Trulieve CEO Kim Rivers said, "The pending acquisition of Harvest will be transformative and will build on our profitability, expanding our runway for growth." 

This deal will give Trulieve a presence in five new states -- Arizona, Colorado, Maryland, Nevada, and Utah. These states will increase the company's total addressable market by $6.7 billion based on 2025 estimates. 

The primary question for Trulieve in the past has been whether or not it could achieve success outside of Florida. The acquisition of Harvest should significantly boost the company's chances.