Trulieve Cannabis Corp. (CSE: TRUL) has finalized its acquisition of Connecticut-based The Healing Corner, Inc., which will give the giant U.S. cannabis company another state to operate in.
Trulieve is one of the top 10 marijuana companies in the world and is headquartered in Florida where it holds a strong presence with 27 dispensaries. But acquiring Healing Corner will give the company another state to sell medical pot in, adding it to market expansions in California and Massachusetts also via acquisition.
One of the core pillars of Trulieve’s expansion is to seek opportunities with financial discipline and focused approach to brand and customer experience. The Healing Corner has demonstrated a strong track record of profitable growth and we believe we are well-positioned to leverage our combined vision of delivering exceptional customer experience and best-in-class products.
– Kim Rivers, CEO of Trulieve
Adding Healing Corner expands Trulieve’s medical marijuana market footprint, but Connecticut could be in line for legal recreational cannabis to further drive demand and expansion for the company. But Trulieve may not gain any logistical advantages with legalization since transporting marijuana across state lines is still illegal.
The legal hurdles in the U.S. may also make acquisition the best way for larger companies like Trulieve to expand. Currently, companies cannot develop a distribution network and ship products to out-of-state dispensaries. They need separate operations in each state and acquiring a company is a much easier approach than starting from the ground up.
Why Connecticut makes sense
Connecticut has reported opioid abuse problems and emerging scientific research is showing cannabis as a safer option to treat pain, and overcome opioid addiction.
And with access to Connecticut, Trulieve would be geographically closer to New York, a potentially lucrative market. Lawmakers in New York are introducing a bill to legalize recreational marijuana and the populous state could be another key option for the company to look at.
Trulieve growing strong brand
Trulieve has already had strong success in its existing markets, generating more than US$100 million in sales in 2018. The Florida-based company has been growing fast and could be in prime position to establish itself further if federal legalization takes root.
Trulieve’s stock rose almost 50 per cent this year and with a modest market cap of around US$2 billion, there’s still potential for the valuation to rise higher.
The company is expected to release its first-quarter earnings on May 29.