Trulieve Cannabis' quarterly loss narrows on demand boost (updated)

Trulieve Cannabis

09/05/2024 16:34

(Adds market reaction and analyst comment in paragraphs 8 and
11)
    By Srivastava  Vallari
       May 9 (Reuters) - Pot firm Trulieve Cannabis  TRUL.CD 
posted a narrower first-quarter loss on Thursday, driven by
higher sales and robust demand.
    The Florida-based company's net loss attributable to
shareholders narrowed to $23.1 million in the quarter that ended
March 31, down from $64.1 million a year earlier. 
    
    WHY IT'S IMPORTANT
    Florida, with a population of more than 22 million, is a
crucial medicinal marijuana market for Trulieve, which enjoys
significant market share within the state.
    Trulieve has been expanding its presence across the U.S.
with plans to open 25 new stores in 2024 as it hopes to benefit
from the potential legalization of the drug in Florida and at
the Federal level.
    
    CONTEXT
    Last month, the U.S. Department of Justice moved to
reclassify marijuana as a less dangerous drug, a step that will
allow pot firms to deduct normal business expenses from their
profit, thereby reducing the tax burden and boosting
profitability.
    Successful reclassification would also enable pot firms to
uplist to major U.S. stock exchanges, improve banking and
consumer access, and make medical research easier to conduct.
    Earlier this year, the Florida Supreme Court had allowed
voters to decide on the fate of recreational use of marijuana in
the state through a referendum on the November ballot.
    
    MARKET REACTION
    Shares of the company rose 4.6% to C$15.55.
    
    KEY QUOTES
    "With strong performance in our core business and several
meaningful catalysts on the horizon, the outlook has never been
brighter," said CEO Kim Rivers.
    "Given our financial performance and significant scale in
key markets, Trulieve is best positioned for the coming wave of
growth catalysts," she added.
    ATB Capital Markets analysts said in a note that
"...Trulieve has significant capital allocation optionality,
positioning the company well for potential Florida adult-use
legalization, or expansion in other markets."
    
    BY THE NUMBERS
    Trulieve posted revenue of $297.6 million in the first
quarter, beating analysts' expectations of $285.9 million,
according to LSEG data.
    Loss from continuing operations narrowed to 16 cents per
share in the January-March quarter, from 18 cents per share a
year earlier.

 (Reporting by Vallari Srivastava in Bengaluru; Editing by Ravi
Prakash Kumar)
 ((Srivastava.Vallari@thomsonreuters.com;))