Trulieve Q3 Revenue Grows 34% YoY, What About Adjusted EBITDA?

Trulieve Cannabis Corp. TRUL TCNNF released results for the quarter ended September 30, 2022, revealing revenue of $301 million, an increase of 34% compared to $224 million in the same period of 2021.

Q3 2022 Financial Highlights

• Achieved GAAP gross margin of 56%, with gross profit of $168 million, compared to gross margin of 69%, and gross profit of $154 million in Q3 2021.

• Net loss was $115 million, compared to net income of $19 million in Q3 2021.

• Generated adjusted EBITDA of $99 million, or 33% margin, compared to $98 million or margin of 44% in Q3 2021.

• Ended the third quarter with $114 million in cash.

Q3 2022 Other Highlights

• Invested $38 million in capital expenditures. Expect significant decline in supply chain investments in 2023 following a multi-year investment cycle to support future growth.

• Coordinated response efforts for Hurricane Ian. Deployed mobile tech and operational teams to deliver supplies and donations, assist recovery efforts, and restore operations.

• Expanded market leading retail positions in Arizona, Florida, and West Virginia, with 11 new dispensary openings, including the first Trulieve branded store in Arizona, in the Roosevelt Row neighborhood of Phoenix.

• Increased utilization at new indoor 750,000 square foot cultivation facility in Florida, allowing for lower production costs and banking of legacy capacity for future use.

• Commenced cultivation operations in Georgia to support production of low THC oil products for retail launch in early 2023.

• Rolled out customer data platform in Arizona and Pennsylvania while deepening capabilities in Florida. Continue to refine our digital customer journey using AI driven technology and integrated commerce capabilities.

• Contributed to the Smart and Safe Florida campaign, which aims to legalize adult use marijuana in Florida through a ballot initiative in November 2024.

Recent Developments

• Launched Khalifa Kush Cannabis products exclusively in Florida at Trulieve dispensaries in October.

• Expanded retail network in core markets with two new dispensaries in Arizona and Florida.

• Rebranded Glendale, Arizona dispensary. Plan to rebrand additional Arizona locations ahead of peak tourism and sporting events in February and March 2023.

• Awarded cannabis cultivation license in Connecticut which allows for two additional dispensaries.

• Currently operate 178 retail dispensaries and over 4 million square feet of cultivation and processing capacity in the United States.

"Our team demonstrated tremendous flexibility and cross functional capabilities during the third quarter," stated Kim Rivers, Trulieve CEO. "We navigated macroeconomic pressure, changes to dosing limits in our core state of Florida, and the impact of Hurricane Ian while making further progress streamlining the organization."

Rivers continued, "U.S. cannabis has significant white space ahead, with many states yet to implement medical or adult use programs and a growing appetite for substantive federal reform. Trulieve has been preparing for this next phase of industry evolution for years, building our regional hub strategy, scaling cutting edge cultivation and manufacturing capacity, expanding our leading retail platform, investing in data technology and perfecting the customer journey."

Outlook
The company anticipates fourth quarter results will be influenced by holiday retail performance and promotional activity across core markets during the latter half of the quarter. Based on the company’s performance year to date and current trends, the company is targeting the low end of 2022 guidance of $1.25 billion to $1.3 billion in revenue and $415 million to $450 million in adjusted EBITDA.

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