TRUL:CN gains an additional share in Florida
Trulieve reported Q1 EPS of $.12, a penny above consensus estimates. Revenue grew 21% sequentially and was 5% above expectations. SSS for the 22 stores in the comp base increased 27%, decelerating from 44% sequentially. EBITDA exceeded consensus estimates by 28%. Management reaffirmed revenue and EPS guidance for the year, which seems prudent, but conservative. The company is carrying more inventory, especially in oil than desired, but the plan to bring that in line by year-end should be achievable. Management said demand in Florida had increased 32% in fuel and 39% in flower for the past eight weeks compared to the weekly average in the preceding eight weeks leading up to COVID-19. Trulieve outperformed the state and saw 39% growth in oil and 59% growth in flower over the same period leading it to gain about four share points to 54%. Trulieve continues to have a robust pipeline of openings in Florida and fully intends to maintain its dominant share.
A healthy balance sheet, prudent growth strategy, one of the best CEOs in the industry, and industry-leading margins is why Trulieve stands apart in the industry.
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Michigan eases access to licenses for those with marijuana convictions
Recreational sales in Michigan began in December, and total marijuana sales in April were $33.8 million, up from $25.2 million in January. Now Michigan is making it easier for more people from low-income communities and with past marijuana convictions to get licenses to start cannabis businesses. The changes will increase the number of communities eligible for the state's social equity program from 41 to 184 and further reduce fees for qualified applicants. Communities that now have higher levels of marijuana-related convictions than the state median and at least 30 percent of the population living below the federal poverty level qualify for the program. Starting on June 1, the poverty threshold will be reduced to 20 percent.
USDA cuts hemp out of access to some coronavirus aid
Hemp and tobacco producers can't claim a piece of the USDA's $16 billion direct payment program; the agency said this week. While the marijuana industry has been cut off from any federal aid offered because of the public health crisis, it seemed that the hemp industry would be eligible since Congress legalized the crop in the 2018 farm bill. The USDA has approved 42 state and tribal hemp plans so far. Getting cut off from USDA aid is the latest blow to the industry that was struggling with a lack of federal clarity on CBD products. Hemp companies, however, are still eligible for Small Business Administration loans, including Economic Injury Disaster Loans.
