TCNNF - Trulieve's Growth Trajectory: Q1 Success Florida Legalization Hopes And DEA Rescheduling Impact
2024-05-21 23:20:45 ET
Summary
- Trulieve reported a 4% increase in total revenue to $298 million for Q1 2024 and a significant rise in gross margin to 58%.
- The Florida Supreme Court approved a ballot measure for the November 2024 election to legalize recreational cannabis, potentially increasing Trulieve's annual revenue by $600 million if passed.
- The DEA's announcement to reschedule cannabis to Schedule III could remove the burdensome 280E tax, significantly impacting Trulieve's financial position and its ongoing tax dispute with the IRS.
- Trulieve appears undervalued compared to its peers, with a forward revenue multiple of 1.87 and EBITDA multiple of 7.75, indicating strong growth potential and a solid capital structure.
- With continued growth and strategic investments, Trulieve is on track to surpass Curaleaf and become the largest U.S. multi-state operator by revenue in 2025, especially if Florida legalizes adult-use cannabis.
Since my previous analysis of Trulieve Cannabis Corp ("Trulieve") (TCNNF) ((CSE:TRUL)), while Trulieve's 2024 Q1 financial results were released, several other historical events also took place.
These historical events are:
- On April 2, 2024 , the Florida Supreme Court approved the ballot measure to legalize recreational cannabis in November 2024 if this ballot gets over 60% vote
- On April 30, 2024 , the news that the United States Drug Enforcement Administration ("DEA") will reschedule cannabis to Schedule III was announced, which was later confirmed by the DEA.