A fully budded marijuana plant is seen during the Cannadelic Miami expo, in Miami, Florida, U.S. February 5, 2022. REUTERS/Marco Bello/File Photo
March 30, 2022
By Arunima Kumar
(Reuters) -Trulieve Cannabis Corp reported a 24% rise in fourth-quarter adjusted core profit on Wednesday, helped by strong demand for pot and related products.
Trulieve’s shares were up 2.3% at C$26.48.
The results come as the sector has drawn renewed investor interest with a cannabis decriminalization bill heading for vote in the U.S. House of Representatives this week.
“Certainly, we would all like to see federal change and certainly the American people are supportive,” Chief Executive Officer Kim Rivers told Reuters.
However, she added that the industry has not been driven by the requirement for a federal change.
“This is a state-by-state operation and what’s happening at the state level, is, at this juncture more impactful on our businesses as well as on people’s access to cannabis than what is happening at the federal level,” Rivers added.
Trulieve, which operates in 11 states including Arizona, Florida, and Pennsylvania, said fourth-quarter revenue surged 81% to $305.3 million also boosted by its $2.1 billion acquisition of medical pot producer Harvest Health.
The company said it expects full-year 2022 revenue to be in the range of $1.3 billion to $1.4 billion, and adjusted core earnings in the range of $450 million to $500 million.
U.S. cannabis sales, which boomed during pandemic-led lockdowns, is forecast to reach $46 billion by 2026, according to industry research firm BDSA, as states like New York and New Jersey open up.
Still, margins and profits remain thin, triggering calls from investors and analysts for consolidation to improve profitability by finding savings in scale.
Trulieve Cannabis posted a loss of $71.5 million for the quarter ended Dec. 31, compared to a year-ago profit of $3 million.
The company took $73.3 million of non-recurring fair value of inventory step up, and acquisition charges primarily associated with the Harvest buy.
(Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel)