Trulieve Earnings
TCNNF is a USA Long.
For 3Q21, Trulieve beat on earnings with revenues of $224.1 Million Vs. $221.5 Million Estimates and on EBITDA with 3Q21 $98 Million (A)EBITDA Vs. $90 Million estimates. As expected gross margin declined from 75% to 68.7% in 3Q21. The company reported a Net Income of $18.6 Million, which was impacted by $16.4 Million of one-time compensation costs associated with the Harvest acquisition. The company stated it would now be focusing its expansion on the Florida, Pennsylvania, and Arizona markets. According to THe Hedgeye State trackers, the Pennsylvania and Arizona market has had slowing growth in the past few months. On the other hand, Trulieve's core market has been growing its patient count and sales volumes in Florida.
Tilt Earnings
TLLTF is a USA Long.
Tilt put up strong top-line numbers, but inflation/logistics costs were elevated. As such offered guidance on the low end of their previous revenue range of $205-$210 Million due to product approval delays in Pennsylvania. Revenue increased 37% to $53.4 million, driven by growth in both cannabis and inhalation and accessory revenue. Cannabis revenue increased 19% to $11.2 million, and inhalation and accessory revenue increased 42% to $42.1 million. The company revised its EBITDA (A) down outlook to $24-26 Million from $30-32 Million. This was due to headwinds in Massachusetts and Pennsylvania and increased freight costs from shipping vapes from China. Two of their dispensary locations will be receiving adult-use licenses shortly. The company stated their dispensaries usually saw a doubling of revenues when medical-only dispensaries converted to adult-use. For reference, the current run rate for one of their dispensary locations in the state is $10 Million, expected to double when adult use is instilled.
Tilt provided an update on their Long Island operation with the Shinnecock Indian Tribe. They expect to be breaking ground soon to commence construction of their grow facility and dispensary. Tilt expects to be operational by the end of 2022. The company could accelerate the buildout if the state of NY allows sales across sovereign borders sooner. The cannabis industry in each state will cause margins to contract. Tilt's unique strategy allows it not directly to compete with MSOs and instead supplement them with their B2B strategy.
Michigan SALES Tracker
In October, sales in Michigan remain strong as they grow sequentially by 1.4% and 58.8% YoY to $164 Million. Recreational sales were up 2.8% sequentially, while medical sales were down 3.6% sequentially. Adult-use sales have been taking a share of sales each month from medicinal. Recreational sales are up 115% YoY, while medical sales are down 19% YoY. The most significant subcategory increases are being seen from the Vape cartridges and Shake/Trim category. Looking at run-rate, the total rate is currently $1.96 Billion, with $1.5 Billion made up of adult use and $.45 Billion made up of medicinal.
