If You Invested $1,000 in Trulieve Cannabis in 2018, This Is How Much

A lot of the air has been let out of the marijuana market’s balloon since the heady, early days of the Canadian green rush. The legalization of cannabis in Canada failed to supercharge growth in the way that was expected, and the patchwork, state-by-state efforts in the U.S. still leave pot producers caught up in a limbo of regulation and taxation that undermines their potential.

Yet one marijuana company still rises to the top despite the proliferation of competitors, and Trulieve Cannabis (OTC:TCNNF) remains one of the best-performing pot stocks on the market, even after seeing its own valuation cut by a third from the all-time high hit in March.

An investor who put $1,000 into Trulieve’s reverse merger in 2018 would be doing quite well today, especially in comparison with other pot stocks available at the time. Let’s see why the vertically integrated “seed to sale” medical marijuana company was such a good investment, and if it remains so today.

Image source: Getty Images.

A budding giant

Trulieve is the largest multistate operator (MSO) in Florida, with 105 operating marijuana dispensaries. By blanketing the Sunshine State with a retail presence, it has helped the company effectively build its brand by leveraging its marketing budget.

Having achieved economies of scale in one state, Trulieve is now using that dominant position to replicate its growth trajectory in other states and has a presence in 11 states. As of Oct. 1, it had almost 150 operating dispensaries.

What makes Trulieve different is that it’s a profitable MSO and has been operating in the black for 14 consecutive quarters. And following its acquisition of Harvest Health & Recreation, an MSO in Arizona — a potential $1 billion cannabis market all its own — Trulieve is now the largest and most profitable MSO on the market.

In the second quarter, Trulieve had combined revenue of $318 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $123 million, the most for any U.S. MSO.

Image source: Trulieve Cannabis.

Smoking the competition

It’s easy to see why Trulieve is doing so well. By targeting its initial growth phase, it created a dominant presence in Florida, where it has a 28% share based on the number of retail dispensaries and a 50% share of the dried-flower market.

It notes that 95% of the nearly 620,000 registered medical marijuana patients in the state have visited a Trulieve dispensary, giving it incredible mindshare among the population.

It will next be moving into nearby Georgia, where it was just granted one of two Class 1 productions licenses for a 100,000-square-foot production facility. It will also be allowed to operate five retail stores.

By operating in states that limit the number of licenses available to be issued, Trulieve’s competition will be limited, though rivals such as Curaleaf, which lost out to Trulieve, are protesting the awards, and that may delay expansion….