Trulieve Cannabis posts 24% jump in core profit as pot demand surges

A fully budded marijuana plant is seen during the Cannadelic Miami expo, in Miami, Florida, U.S. February 5, 2022. REUTERS/Marco Bello — RC2QDS9BD7MA

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March 30 (Reuters) — Trulieve Cannabis Corp (TRUL.CD) reported a 24% rise in fourth-quarter adjusted core profit on Wednesday, helped by strong demand for pot and related products.

The results come as the sector has drawn renewed investor interest with a cannabis decriminalization bill heading for vote in the U.S. House of Representatives this week.

Trulieve, which operates in 11 states including Arizona, Florida, and Pennsylvania, said fourth-quarter revenue surged 81% to $305.3 million also boosted by its $2.1 billion acquisition of medical pot producer Harvest Health.

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The company said it expects full-year 2022 revenue to be in the range of $1.3 billion to $1.4 billion, and adjusted core earnings in the range of $450 million to $500 million.

U.S. cannabis sales, which boomed during pandemic-led lockdowns, is forecast to reach $46 billion by 2026, according to industry research firm BDSA, as states like New York and New Jersey open up.

Shares of Trulieve Cannabis are listed in Canada as the two large U.S. stock exchanges do not allow companies that grow or sell the plant to list their shares. The stock is down 21.3% year-to-date.

Still, margins and profits remain thin, triggering calls from investors and analysts for consolidation to improve profitability by finding savings in scale.

On a reported basis, Trulieve Cannabis posted a loss of $71.5 million for the quarter ended Dec. 31, compared to a year-ago profit of $3 million.

The company took $73.3 million of non-recurring fair value of inventory step up, and acquisition charges primarily associated with the Harvest buy.

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Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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