Trulieve Cannabis Corp (CSE:TRUL) released its fourth-quarter earnings on Wednesday. For the quarter ending December 31, the company’s sales totalled more than $35.9 million, increasing by 172% year over year. For all of 2018, its sales were $103 million and were five times what Trulieve recorded in 2017. It was nothing short of an amazing performance for The Company as it showed tremendous growth while also keeping its costs under control as well.
Trulieve reported a net income of $10.7 million for the quarter, which was well up from earnings of just $0.3 million one year ago. For the full year, net income totalled an impressive $43 million, which was also well up from 2017’s tally of just $3.6 million. However, the results are a little inflated for 2018 as The Company did benefit from fair value adjustments that added $37 million back to its gross profit. But even without the boost, Trulieve still would have netted a profit and that’s something not many cannabis companies can say.
The Company did see a big jump in its operating expenses, with sales and marketing expenses hitting over $25 million for the year and were a big increase from the $7 million that Trulieve incurred in 2017. For the year, expenses were up about 257%. And while that’s undoubtedly high, it’s still not as high as the growth in revenue that Trulieve achieved. Ultimately, as long as expenses are not rising faster than sales, that’s usually a good sign that The Company isn’t digging itself into a hole.
Trulieve has been actively adding dispensaries as it continues to grow in Florida in what’s a very lucrative market for medical marijuana given the high amount of retirees in the State. However, The Company isn’t focused just on the Florida market as it has entered agreements to acquire companies in both Massachusetts and California.
Big plans ahead
As strong of a year as 2018 was for Trulieve, The Company isn’t settling on what it has accomplished. It’s looking for more growth as it still sees many opportunities to expand its business.
For 2019, Trulieve expects to revenues double and reach $214 million for the year. The Company notes that this will be dependent on adding more dispensaries within Florida while successfully executing on its multi-State expansion. It’s an exciting time for Trulieve as there will be even more opportunities for expansion as States across the U.S. continue to legalize marijuana, and so I wouldn’t be surprised if it moves into even more markets before the year is over.
Trulieve has been one of the hottest pot stocks in 2019 already, rising more than 75% since the start of the year. However, investors weren’t too receptive to the strong results as the stock was down 3% by the end of Thursday’s close.
