Trulieve Cannabis Corp (CNSX:TRUL) (OTCMKTS:TCNNF): There Are Few Pot Stocks Out There Like It

For investors hunting for great opportunities in the marijuana sector, Trulieve Cannabis Corp (CNSX:TRUL) (OTCMKTS:TCNNF) is definitely a strong candidate. Trulieve is one of the stocks leading the recovery from the recent broad selloff in the marijuana sector that has left many marijuana stocks at their 2-year lows.

A recovery that began unfolding in September, marked by episodes of profit-taking along the way, has seen Trulieve bounce back strongly from the bottom it sank to in August. At $12, the stock has gained about 60% since late August, and it looks poised to move even higher.

While Trulieve has regained much of the ground it lost in recent months amid a widespread selloff in the marijuana sector, there still exists huge upside potential in the stock.

Firstly, Trulieve is still more than 30% off its 2019 peak, so there is still ample room for the stock to rally. Moreover, Trulieve enjoys strong competitive advantages as well as great growth potential, which should continue to support robust revenue growth at the company and propel the stock to greater highs.

About Trulieve Cannabis

Trulieve is an American marijuana company whose business is currently concentrated in Florida. The company combines retail stores and home delivery to increase access to its products and build a loyal customer base in the process. Trulieve has set its sight on expanding into California, Massachusetts and Connecticut marijuana markets as it pursues more growth opportunities.

Trulieve Cannabis enjoys strong competitive advantages

Trulieve was the first company to enter Florida’s marijuana market, which is currently for medical products as the state has not yet legalized recreational use of marijuana. Being the first-mover in Florida has brought many benefits to Trulieve. For example, the company has dominated Florida’s medical marijuana market, boasting about 55% market share. Trulieve wants to expand its Florida market share even further.

To increase access to its products in Florida, Trulieve has been growing its retail footprint in the state. The company currently operates 39 marijuana stores in Florida and aims to open more in the coming weeks as it targets to ends the year with 44 stores. In addition to opening more stores to be closer to its customers, Trulieve also offers home delivery of its products. The store and home delivery strategies are fueling sales at Trulieve as the company continues to build a base of loyal customers. Trulieve’s revenue grew 150% year-over-year to $70.7 million in the third quarter.

“Our third-quarter results reflect our continued customer loyalty, growth, and leadership position,” commented Trulieve CEO Kim Rivers.

Trulieve’s growth potential is enormous

The marijuana industry in Florida is poised for a big boom. Florida’s marijuana industry will generate more than $1.6 billion in revenue by 2022, from less than $630 million in 2018, according to projections by ArcView Market Research and BDS Analytics. Therefore, on top of being the third most populous US state, Florida is on track to become the nation’s third-largest marijuana market by revenue. Florida’s marijuana market could grow even bigger considering the strong support for efforts to also legalize recreational use in the state. 

In addition to Florida, Trulieve has also set its sight on the California, Connecticut, and Massachusetts marijuana markets. California has the largest marijuana market among the US states. California’s marijuana market is on track to more than double in three years to reach $5.6 billion in revenue by 2022, from $2.5 billion in 2018. The marijuana market in Connecticut generated $84.6 million in revenue in 2018 and is expected to reach $208 million by 2022. The marijuana market Massachusetts was worth $220 million in revenue in 2018 and is expected to grow to $1.1 billion by 2022.

Therefore, Trulieve is playing for an $8.5 billion revenue opportunity in just the three states of Florida, California, Connecticut, and Massachusetts. The growth opportunity for Trulieve is even bigger considering that some 33 states have passed some forms of marijuana legalization. Moreover, there are efforts in Congress to make marijuana legal all across the US by ending the existing federal ban on the substance, which should go a long way into expanding the market opportunity for Trulieve.

Trulieve Cannabis is in solid financial standing

Trulieve is one of the few truly profitable marijuana companies. The company made a net profit of $60.3 million in the third quarter. Being profitable has helped Trulieve build a strong war chest. The company finished the third quarter with a cash reserve of more than $100 million.

Bottom line

For investors looking for a marijuana stock with strong competitive advantages, huge growth potential and solid financial standing, Trulieve Cannabis is definitely worth considering.

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Disclosure: We have no position in Trulieve Cannabis and have not been compensated for this article.