Trulieve Earnings + Call Notes
U.S. cannabis leader reports and looks ahead.
$287M Revs; est. $284.7M
$100M AEBITDA; est.$97.3M
$170M GP; est. $168.6M
$35.7M OI; est. $47.2M
59% GM; est. 59.2%
$2M NI; est. ($5.2M)
$0.02 EPS; est. ($0.04)
Management Commentary
“We applaud President Trump and AG Blanche for taking bold, decisive action to reclassify medical marijuana to Schedule III," said Kim Rivers, Trulieve CEO. "With 206 dispensaries and over 3.5 million square feet of production serving medical patients, Trulieve is well positioned to explore new opportunities enabled by rescheduling."
Call Notes
Trump delivered on his promise to address cannabis reform
Rescheduling development has major implications for TCNNF
Robust scientific research can now be conducted
Operators can now register w/ the DEA
206 dispensaries today, supported by over 3.5m sq ft of cultivation capacity in 4 states that are strictly medical marijuana operations.
Applied to register all dispensaries in medical only markets.
State licensed business now able to deduct ordinary expenses.
Formal process to reschedule A/U has resumed, will conclude by July 16th.
Optimistic marijuana rescheduling can be finalized this year
Actively exploring ways to uplist to a major exchange and address the 280e UTP
Industry leading margins and robust cash generation
Q1 revs of $287m, in line w/ guidance and seasonal trends
59% GM
$100m Adj EBITDA, 35% margin
Raised $60m senior notes during the quarter
Generated $56m OPCF
$353m cash
Traffic dipped slightly and avg basket size flat QoQ
Traffic improved in March, rebounding to December levels
Holiday performance on 4/20 strong, traffic and units up 20% and 26% YoY
Record wholesale revenue up 22% YoY
Wholesale demand remains strong.
Carefully balancing growth and counterparty risk.
Concentrating on 4 efforts ; expanding access, investing in growth, growing customer base, elevating branded product portfolio
Americans favor common sense cannabis reform
Granted conditional license in TX, submitted DD materials and working to finalize license
Only 11% of TX polled were aware of the TCUP program
GA legislation to expand medical program expected to sign and commence next week
GA expansion adds HIV IBS and Lupus, and new form factors including vapes
GA rulemaking on new products could be in place by Q4
Investing in growth initiatives ; retail and production upgrades and expansion at existing upgrade, new market in TX, technology for hyper personalization of customer messaging
YTD have refreshed/remodelled 10 locations and opened 7 locations
Plan to quickly launch retail operations in TX, when able
Introduced Project Hyper, AI to increase speed to market and real time engagement.
Expect to realize benefits such as greater efficiency as early as Q4 this year
Engagement through paid media, local community efforts, continues to attract new patients to TCNNF
Launched mobile app in FL last year, 1 centralized place for browsing, deals awards ; over 50k downloads
Over 1m reward program members, spending 2.4x more than non-members, representing 78% of transactions
Q1 retention remains strong, 69% company wide, 78% in medical only markets
Sold over 12m branded product units in Q1
Roll One and Modern flower represent 45% of in-house branded sales
Recently launched “Legacy, by Cultivar” premium craft flower
New store openings, OH A/U, and wholesale growth was offset by pricing pressure
$170m GProfit, 59% GMargin
expect quarterly margin to fluctuate
$105m SG&A, 37% margin (vs. 40% in YoY period)
$2m net income
$0.01EPS
$100m adj EBITDA, 35% margin
UTP includes $15m interest and $11m in overpayments towards taxes
$56m OPCF
$13m CAPEX
$42m FCF
Expect Q2 revs to increase by low single digits QoQ
Expect Q2 margins to fluctuate QoQ, but remain broadly in line w/ recent performance
FY’26 expect at least $250m
OPCF and CAPEX of up to $85m
May accelerate investment in TX
Actively pursuing all opportunities, not prepared to go into detail on uplisting
Believe TCNNF has a track record of pushing hard and moving as fast as possible
Seeing deal flow pick up, valuations remain all over the place
Wholesale is part of strategic mix, but secondary vs. vertical strategy
In markets like PA AZ OH, where have great penetration of internal brands at owned stores, more recently have embraced the opportunity to expand brand into wholesale channel in a more robust way
Seeing fantastic wholesale results around Modern Flower and Roll One brands
Believe FL and TX opportunities are significant
Market size in FL or TX is very large, converting patients is a very large opportunity
Meeting customers where they are digitally and physically, have ramped this strategy in a meaningful way in FL
Believe Trump admin was very coordinated in announcements around rescheduling
Treasury immediately issued press release w/ color, indicative of expectations set for them to move quickly.
Helpful that AG order had language around retroactivity
All indications expect this to be front and center for treasury
Should be getting additional guidance around allocation metrics / process they eluded to in press release for this year and future years
Hope retroactivity is a fast follow
Look at this as a when, not if
Very clear brackets around previous years and previous year exposure
Appears to be a concerted effort to have a broad resolution to tax issue
Waiting on additional guidance and clarity from DEA if medical becomes an automatic green light on international export, a bit of conversation needs to be had there
TX is a very large market, could be the size or bigger than FL
GA having good conversations w/ regulators, believe could move towards turning back on pharmacy sales program
JeffCo is fully utilized, primary operations in FL, have other capacity that could be brought online if there was a meaningful opportunity (for export)
Need regulatory clarity and need to be sure domestic opportunities are less attractive than the US, not sure on that yet.
Encouraging independent pharmacies in GA to register as a medical dispensary under the DEA portal, believe once that is complete, could restart pharmacy sales in GA
Starting to see basket stabilization, after a fairly volatile ’25 year
Traffic relatively flat YoY, down a bit QoQ (normal for Q1)
Basket from Q4 to Q1 has stabilized, down a bit YoY ; stability into Q2 is a good sign
Believe it’s a little early to tell if you can ship medical products to two diff DEA registered entities in different states
Believe new S3 pathway for state licensed operators folds in the state-specific requirement under state programs
Likely would need to see changes to state programs prior to allowing any type of state by state export activity
In an evaluation period right now, a lot of moving parts, exploring opportunities to get on a US exchange
TCNNF board continues to evaluate share buyback.
/end
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CB1 has a position and nothing contained herein should be considered advice.