Trulieve, Ascend Wellness CEOs chart multi-state growth


CEOs by their nature remain an optimistic group, but with more states to offer growth in the adult cannabis business, the leaders of both Trulieve Cannabis Corp. of Ascend Wellness Holdings Inc. they have a lot of room for revenue expansion as these new territories come out. line this year.

Trulieve TCNNF,
+ 3.24%

TRUL,
+ 1.75%
and Ascend Wellness AAWH,
+ 7.07%
it delivered mixed first-quarter results, but with medical and adult cannabis programs emerging in several states, companies shifted their focus to future prospects in Florida, New York and New Jersey.

Acquisitions also remain on the table, especially for Trulieve, which closed the $ 2.1 billion acquisition of Arizona-based Harvest Health & Recreation Inc. in October as one of the largest merger and acquisition deals. of the sector.

Trulieve Cannabis reported a first-quarter net loss of $ 32 million, or a 17-cent fee, a net income of $ 30.1 million, or a 24-cent share in the first quarter. previous year.

Breaking down items related to its acquisition of Harvest and other one-off costs, the company earned one cent per share, below Wall Street’s estimate of 3 cents per share, according to FactSet data.

Revenue rose 64% to $ 318.3 million, up from an estimated $ 306 million.

The company recorded $ 45.1 million in cash flows from operations and ended the quarter with a cash balance of $ 267 million, with operations in 11 states.

Trulieve still expects annual revenues of between $ 1.3 billion and $ 1.4 billion. FactSet’s consensus was $ 1.340 billion.

With a 30% market share in Florida and 100 stores, Sunshine State continues to offer growth opportunities, CEO Kim Rivers told MarketWatch.

“We will continue to grow our footprint in Florida; we do not expect it to slow down,” he said.

During the first quarter, the state booked an average of 3,700 new medical cannabis patients per week.

Trulieve is on track to increase its presence in Maryland and Florida, as well as growth in Pennsylvania and West Virginia, and sees additional investment in Arizona.

Trulieve is also continuing to look for opportunities to buy smaller cannabis companies in the southeast, northeast and southwest.

“We will be procuring around these centers and on board [small] “We have a solid balance sheet and proven access to capital, and we will continue to be opportunists.”

Also read: Acreage sees the cannabis business growing in the Northeast

Ascend Wellness eyes presence of the Big Apple

Ascend Wellness said Wednesday that its first-quarter loss fell to $ 27.8 million, or 16 cents a share, from a loss of $ 48.2 million, or 45 cents a share in the first quarter. last year.

Revenue rose to $ 85.1 million from $ 66.1 million.

Ascend Wellness failed to hit the Wall Street target by a loss of 3 cents per share and an estimated $ 86.4 million in revenue, according to FactSet Data.

Ascend Wellness co-founder and CEO Abner Kurtin said the company is optimistic about its prospects for adult cannabis use in New Jersey, with one store open and two more on the way to Garden State.

It is also preparing for a larger presence in New York after reaching an agreement with MM Enterprises USA LLC MMNFF,
+ 9.09%
in a lawsuit for the sale of MedMen NY Inc.

Ascend Wellness agreed to raise its purchase price by $ 15 million from $ 88 million from $ 73 million to settle the lawsuit filed Jan. 14 between the two cannabis companies.

Even with $ 88 million, the purchase is much lower than the $ 247 million acquisition of Stain by RIV Capita Inc. CNPOF,
+ 2.51%
a unit of Scotts Miracle-Gro Co. SMG,
+ 3.52%,
to enter the New York market, Kurtin said.

The MedMen NY deal includes four medical dispensaries in Manhattan, Long Island, Syracuse and Buffalo, as well as a cultivation facility in Utica.

“We’re really excited about New York,” Kurtin said. “The seller didn’t like the price, which created the situation.”

Ascend Wellness plans to maintain the MedMen Fifth Avenue shopping mall, which has been described as Apple’s herbal store.

“It’s a great location for locals and tourists alike,” Kurtin said.

Trulieve shares have fallen by about 44% in 2022 as cannabis shares have weakened in the face of low prospects for federal legalization and general stock market concerns over inflation and the recession.

Ascend Wellness is down 48.8% in 2022, while the MSOS AdvisorShares Pure Cannabis ETF
+ 3.76%
down 44.5%.

Also read: This is why Curaleaf looks beyond headwinds and adheres to the 2022 revenue vision



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