CFO Shuffle: Trulieve Tries to Shake Off Bumps on Road to Growth

Executives remain optimistic about its current growth trajectory.

Florida-based Trulieve Cannabis Corp.‘s CFO woes took another turn when second-quarter filings with the U.S. Securities and Exchange Commission revealed misdeeds by one of the former holders of the post.

In June, Alex D’Amico stepped down from his position as chief financial officer of Trulieve (CSE: TRUL) (OTCQX: TCNNF). In the regulatory filings, the company said that his departure had nothing to do with disagreements about how the company was being run, but it went on to say that D’Amico was being investigated for racking up more than a quarter million dollars in personal credit card expenses.

The company’s audit team, with some help from outside lawyers, uncovered discrepancies in D’Amico’s expense claims and corporate credit card usage. The team determined D’Amico wrongly used between $350,000 and $400,000 of company funds for personal expenses.

The company noted that while it was a large sum, the misuse didn’t impact the company’s prior financial statements. Trulieve said it is now weighing options on recovering these funds from D’Amico and addressing any related tax implications.

After D’Amico left, Ryan Blust temporarily took over. Then, Tim Mullany was chosen as the new CFO in July but left just 10 days later for personal reasons. Blust then was asked to step in again while the company launched another search for a permanent CFO.

Optimism Despite Loss

Trulieve also struggled on the financial front during the latest quarter, posting a $404 million loss for the period.

But the speed bumps on the road aren’t deterring CEO Kim Rivers, who pointed to continued rising demand for legal cannabis overall throughout the first half of 2023 during a call with analysts to discuss the latest results. In addition, the company experienced record sales and customer traffic.

“Across our platform, actions to bolster our business resilience and solidify our industry leading position are gaining traction,” Rivers told investors. “Trulieve pays taxes owed on time, which is a differentiating factor among peers. Year-to-date, tax adjusted cash flow from operations was $98 million.”

Rivers also highlighted the company’s expansion efforts, including successful launches in Georgia, Ohio, and Maryland during the quarter. The CEO was also bullish about Florida and Pennsylvania, which are poised to approve adult-use cannabis programs.

A central theme of the call was the company’s commitment to enhancing production, streamlining operations, and managing its finances accordingly. Management emphasized balance between ambitious growth and fiscal prudence, especially as too-hot-to-handle titans of legal cannabis’ past continue to crumble.

Rivers reinforced the company’s $100 million operational cash flow target for the year. She also discussed the company’s efforts to improve its cost structure, focusing on factors most influencing margins.

Upcoming company initiatives include a revamped website set for launch before the next earnings call, as well as an enhanced loyalty program slated for the fourth quarter.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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