Trulieve Cannabis Corp (OTCMKTS:TCNNF) has achieved significant milestones, on the operational front, ever since it became a public company. However, the same cannot be said about the stock, which has continued to underperform. The stock is down by more than 40% for the year.
Trulieve Cannabis Price Analysis
While the stock underperformance is a point of concern, it does not paint a clear picture of the underlying solid fundamentals. For starters, the company is fresh from reporting record-breaking Q3 financials, depicted by a 739% increase in revenue.
The company is also in the process of acquiring Life Essence, Inc. and Leaf Industries as it seeks to strengthen and expand its empire in the industry. Trulieve Cannabis Corp has also confirmed the opening of its 22nd location in Florida as it also continues to expand its footprint in California.
While the stock has taken a significant hit, it has started bottoming out as investors continue to take note of the improving underlying fundamentals. After the recent slide lower, the stock faces immediate resistance at the $13 a share level on the emerging uptrend gaining momentum.
A breach of the $13 a share level should open the door for bulls to push the stock to the $15 as a share level, seen as the next substantial resistance level. On the downside, Trulieve Cannabis Corp faces immediate support at the $10 a share level. A drop followed by a close below the critical support level could give short sellers a reason to continue pushing the stock lower in continuation of the long-term bear trend.
What Does Trulieve Cannabis Corp Do?
Trulieve Cannabis Corp engages in the business cultivation, distribution and sale of medical cannabis throughout the U.S. The company boasts of a wide array of cannabis products that include nasal sprays, Capsules, concentrates and cannabis flower.
739% Revenue Growth
Trulieve Cannabis Corp reporting a 739% increase in revenue might as well be the catalyst that will trigger a bounce back after the recent sell-off. Revenue for the quarter ended September 30, 2018, came in at $28.3 million as adjusted EBITDA increased to $12.6 million from $11.7 million.
In addition to revenue growth, Trulieve Cannabis Corp continues to enjoy high patient retention as it continues to deliver consistent, high-quality products. According to Chief Executive Officer, Kim Rivers, the company remains well positioned to be a dominant leader in the Florida Market.
“These outstanding results in Q3 demonstrate the meaningful progress we’ve made on our strategic plan since becoming a publicly-traded company in September. Looking ahead, we remain focused on scalable growth, including multi-state operational expansion,” Rivers in a statement.
Trulieve Cannabis Corp revenue streams are on course to receive a significant boost. The company is in the process of acquiring a 100% stake in Life Essence Inc. and Leaf Industries. Life Essence will expand the company’s operations into the business of selling cannabis seeds, given its multiple locations in Massachusetts.
Life Essence has already applied licenses to operate three Medical Registered Marijuana Dispensaries. The company has also applied’ for three recreational marijuana licenses and is the process of building a 126,000 square foot cultivation and processing facility.
Leaf Industries is the company that is poised to expand Trulieve Cannabis Corp operations into California cannabis market. The Company is a licensed medical and adult use cannabis dispensary in Palm Springs.
“These transactions mark an important milestone in the growth of the Trulieve brand and our goal of becoming a leading multi-state operator. We look forward to establishing the Trulieve brand and leveraging our proven business model to deliver a truly unique and full-service experience to customers in these booming markets,” said Kim Rivers, CEO of Trulieve.
Trulieve has once again strengthened its competitive edge in Florida with the opening of a 22nd dispensary in the state. The opening of the new location seeks to take care of the ever-growing demand for its products and services in the country.
Trulieve is firing on all cylinders as it continues to strengthen and expand its cannabis empire. A 739% increase in revenue alludes to the fact that that the company’s business model and strategy is working.
The acquisition of Leaf Industries and life Essence affirms the company’s willingness to spend big if the same has the potential to strengthen its long-term growth metrics. For investors, this is the right time to get involved in a stock with huge growth prospects especially after a recent pullback in share price.
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Disclosure: We have no position in TCNNF and have not been compensated for this article.