Trulieve Archives - Green Market Report

Debra BorchardtOctober 1, 2021
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It’s official. Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) and Harvest Health & Recreation Inc. (CSE: HARV, OTCQX: HRVSF) have completed their deal and are now the largest U.S. cannabis operator across a combined retail and cultivation footprint. The deal was valued at $1.2 billion and was announced in May 2021.

Harvest shares will be delisted from the Canadian Securities Exchange at the close of trading on October 4, 2021. Harvest shareholders each received 0.1170 of a subordinate voting share of Trulieve for each subordinate voting share of Harvest held.

“The closing of this transaction marks a transformational milestone in our company’s history and positions Trulieve as the leading medical and adult-use cannabis operator in the U.S.,” stated Kim Rivers, Chief Executive Officer at Trulieve. “I thank all our employees, both Trulievers and Harvesters, for their tireless efforts during this process. The combined footprint provides Trulieve with a solid foundation for continued growth and scale. We look forward to fully integrating Harvest as we continue to execute on our hub strategy in the U.S., creating an unrivaled brand and reputation in the marketplace and value for our shareholders.”

Largest Revenue

The combination of the two companies leads to one of the largest revenue producers in the cannabis industry. Trulieve alone delivered revenues of $215.1 million in the second quarter. It is one of the few large producers that are also profitable having reported net income of $40.9 million in the second quarter and an adjusted EBITDA of $94.9 million. For its part, Harvest reported revenues of $102.5 million, while its net loss before non-controlling interest was $19.2 million, and Adjusted EBITDA2 of $28.0 million. Together the two could have reported $317.6 million in revenue for the second quarter, the highest among U.S. public reporting cannabis companies. The combined companies are also sitting on a comfortable cushion of cash. Harvest brings to the table a solid cash booty of $289.0 million, as of June 30, 2021, while Trulieve brings a recently announced $350.0 million debt financing. Harvest is also contributing $55 million in proceeds from the sale of its Florida license.

“This combination brings together two companies with depth and scale in key markets, providing a platform for growth for years to come,” said Steve White, CEO of Harvest. “Trulieve’s customer centric values match well with Harvest’s dedication to improving lives through the goodness of cannabis.”

After the market closed on Thursday, Trulieve nnounced that it had received commitments for a private placement of 8% Senior Secured Notes due 2026 for aggregate gross proceeds of $350.0 million. Rivers said,“Our strong balance sheet and profitability allowed us to secure a cost of senior debt which we believe is the lowest for a public cannabis company to date. This financing will provide capital to retire a portion of Harvest’s debt when we complete our acquisition and will allow us to use our combined cash on hand to aggressively pursue strategic growth initiatives across key markets post-closing.”

Huge Footprint

Together the combined companies will command a retail network of 149 dispensaries across 11 states and three strategic regional hubs, with market-leading positions in ArizonaFlorida, and Pennsylvania. Trulieve will also be able to feature Harvest’s products in its stores. 


Debra BorchardtAugust 12, 2021
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Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) announced its results for the quarter ended June 30, 2021, as revenue rose 78% to $215.1 million versus last year’s $120 million for the same time period. It was a sequential increase of approximately $21 million or 11%. Trulieve also beat the average analyst estimate from Yahoo Finance for $207 million. Trulieve delivered a net income of $40.9 million, an increase of 116% over last year’s $18.9 million and a sequential increase of 36%.

The company said in its MD&A filing that the increase in revenue is the result of an increase in organic growth in retail sales due to an increase in products available for purchase and overall patient count. Between June 30, 2021, and June 30, 2020, the company opened or acquired 40 dispensaries, contributing to increased retail sales year over year.

“Our performance in the second quarter was strong across all financial and operating metrics,” stated Kim Rivers, Trulieve CEO. “We have become operational in Massachusetts and West Virginia and recently won an application for one of two class 1 production licenses in Georgia. We continue to execute on our national expansion model, building our footprint both organically, with license application awards, and inorganically, with strategic acquisitions.”

Expenses Rise

Growth is becoming expensive. Trulieve said that sales and marketing expenses increased by 72% from $27.0 million for the three months ended June 30, 2020, to $46.6 million for the quarter. The increase in sales and marketing expense came from a higher headcount for the year, as the company continued to add additional dispensaries in efforts to maintain and further drive higher growth in sales and market share and expand into new markets. This increased headcount resulted in higher personnel costs, which was the primary driver for the increase year over year. General and administrative expenses for the quarter also increased by 88% to $14.9 million from $7.9 million last year. The increase in general and administrative expense is the result of entering new markets and ramping company infrastructure to support growth initiatives continued acquisitions resulting in additional transaction and integration costs, and go-forward compliance.

Cash Flow

It takes money to make money as they say. The net cash provided by operating activities was $49.2 million for the six months ended June 30, 2021, a decrease of $28.5 million, compared to $77.7 million net cash provided by operating activities during the six months ended June 30, 2020. The company said this was primarily due to increases in net working capital requirements, including inventory, as it ramps the business to support growth. Net cash used in investing activities was $136.7 million for the six months ended June 30, 2021, an increase of $90.3 million, compared to the $46.4 million net cash used in investing activities for the six months ended June 30, 2020. The increase is due to the increase of property and equipment purchases for the construction of additional dispensaries and continued expansion of our cultivation and processing facilities, as well as acquisitions completed during the period.

Net cash provided by financing activities was $230.0 million for the six months ended June 30, 2021, an increase of $202.7 million, compared to the $27.3 million net cash provided by financing activities for the six months ended June 30, 2020. “The increase was primarily due to proceeds from the closing of an underwritten, marketed public offering of 5,750,000 Subordinate Voting Shares resulting in gross proceeds, before deducting underwriting discounts and commissions and offering expenses payable by us, of $227.9 million (after giving effect to the conversion rate on April 7, 2021).” The cash and cash equivalents were $289.2 million as of June 30, 2021.

Rivers continued, “Trulieve has changed considerably since our first sale in Florida in 2016, and we are only in the beginning stages of what we know we can achieve as a company. We believe the next chapter, including the anticipated closing of the Harvest acquisition, will only continue to build on the strong foundations we have worked tirelessly to establish.”


StaffJuly 15, 2021
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Harvest Health & Recreation Inc.  (OTCQX: HRVSF) is done with Utah and expanding its Florida footprint. Harvest said it had completed the divestiture of its cultivation and processing operations in Utah for what it described as an immaterial amount of cash. The company said that a local operator bought the cultivation and processing operations located in Ogden, Utah. Following the sale, Harvest no longer has operations in Utah.

“We are pleased to have completed this divestiture as part of our strategic plan,” said Chief Executive Officer Steve White. “We will continue to allocate resources to growth opportunities in our core markets.” With that said, Harvest then announced the opening of a new medical dispensary in South Miami Beach, Florida.

“We are thrilled to open our eleventh Harvest location in Florida, one of the fastest-growing medical markets in the U.S.,” said White. “We look forward to serving patients and providing quality products at this new location in one of our core markets.”

Additional Harvest dispensaries in Florida are located in GainesvilleJacksonvilleKissimmeeLehigh AcresLongwoodNorth Miami BeachNorth Port, Olympia Heights, Tallahassee, and West Palm Beach.

Trulieve Buying Harvest

Trulieve announced in May that it was buying  Harvest Health in a deal valued at approximately $2.1 billion based on the closing price of the Trulieve Shares on May 7, 2021. The combined businesses will have operations in 11 states, comprised of 22 cultivation and processing facilities with a total capacity of 3.1 million square feet, and 126 dispensaries serving both the medical and adult-use recreational cannabis markets. In June, Trulieve said that the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 had passed.

Trulieve CEO Kim Rivers said, “Completion of the HSR milestone is exciting and we will continue to work toward closing this strategic transaction. Upon closing, we expect to leverage the expertise and resources of the combined companies to realize meaningful scale and expansion for years to come.”

The Harvest shareholder vote is expected to occur in the third quarter of 2021. Both companies say they continue to work toward obtaining all required regulatory approvals.

 


Debra BorchardtJuly 14, 2021
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While Florida-based cannabis company Trulieve (OTC: TCNNF) is not involved in the trial of businessman John “J.T.” Burnette, the company can’t help but get mentioned in the trial. Burnette is the husband of Trulieve CEO Kim Rivers and she has been attending the hearings as noted with court drawings. The Tallahassee Democrat has been covering the case and reported that on Monday, “Federal prosecutors laid out their case against businessman John “J.T.” Burnette during the first day of his public corruption trial, telling jurors that he and former Tallahassee City Commissioner Scott Maddox conspired together out of greed.”

According to the case, Burnette and Tallahassee City Commissioner Scott Maddox flew to Vegas in December 2016, where they met up with undercover agents posing as Mike Miller, owner of Southern Pines Development, an FBI front company; Mike Sweets, a medical marijuana entrepreneur, and Brian Butler, a “green energy” businessman.  Burnette is being charged with racketeering, extortion, fraud and making false statements. He is also accused of arranging $40,000 in payments to a consulting firm owned by Maddox friend Paige Carter-Smith but alleged to be secretly controlled by Maddox from an out-of-town vendor called Southern Pines Development. The company, which was eyeing potential development projects in town and wanted Maddox’s official help, turned out to be an FBI front. Burnette had wanted advice from Sweets for Rivers.

The Tallahassee Democrat reported that Maddox and Carter-Smith, former head of the Downtown Improvement Authority, pleaded guilty to bribery charges in 2019 and that both will testify against Burnette.

Trulieve Connection

To be clear, Trulieve is not connected to the case. Burnette though was involved in the construction of many Trulieve facilities. In 2018 his construction company received payments of
$8.7million and in the first three quarters of 2019 the construction company was paid almost $28 million. Trulieve has said in a statement, “JT Burnette is a minority owner in the construction business. Trulieve has retained the services of Burnette Construction company, as well as other construction companies over time. These service providers are chosen
because they are knowledgeable, experienced, and provide high-quality services at favorable terms. These business relationships are completely separate from the indictment case against J.T. Burnette. All transactions have been approved by independent board members and the value is provided in our public disclosure documents. They are arms-length and below market in cost to Trulieve.”

Burnette’s lead attorney, Tim Jansen told jurors this week, “He’s trying to help his wife out with Trulieve. So he contacted Mike Sweets for marijuana advice.” The Tallahassee Democrat reported, “The advice turned out to be helpful, Jansen said, adding that jurors will hear more about that.” Some shareholders have faulted Trulieve for not disclosing more information about the case, while others believe the company has adequately addressed it. The trial is expected to last several weeks.

Grizzly Report

In December 2019, stock short-seller Grizzly Reports issued a scathing report on Trulieve and highlighted the accusations that prompted the current trial. In January 2020, Trulieve filed a lawsuit in Florida state court against GRIZZLY RESEARCH LLC alleging, among other claims, defamation for publicly disseminating false and libelous statements about Trulieve to manipulate the stock price and further its own financial interests. The case has supposedly stalled due to the pandemic.

 


Debra BorchardtMay 13, 2021
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Trulieve Cannabis Corp. (OTCQX: TCNNF) announced its results for the quarter ended March 31, 2021, as revenues increased 102% year over year to $193.8 million and increased sequentially by 15% from the fourth quarter’s $168.4 million. This beat the Yahoo Finance average analyst estimate for revenues of $189 million. 

Net income grew 27% year over year to $30.1 million from $23.6 million. The net income really spiked sequentially from the fourth quarter by 889% from just $3 million. While Trulieve released a press release for its first quarter, the actual filing wasn’t available at this writing. The company said it was hosting a conference call at 8:30am est to discuss the earnings. 

“During Q1 we continued to execute on growth in Florida as well as our national hub expansions. Our record revenue and industry-leading EBITDA margins demonstrate our continued focus on execution,” stated Kim Rivers, Trulieve CEO. “The pending acquisition of Harvest will be transformative and will build on our profitability, expanding our runway for growth.”

Operating expenses grew 97% year over year to $57.3 million, but this was only a 10% increase sequentially. The company said it had $60.4 million in cash flows from operations for the quarter.

Rivers added, “Our continued strength in our home state of Florida, as well as the build-out of our northeast hub, with progress in PennsylvaniaMassachusetts, and West Virginia, has generated momentum for an exciting remainder of the year. We expect many positive catalysts in the months ahead, which align well with the current political environment and heightened focus on cannabis in this country.”

The company became a U.S. reporting company effective February 4, 2021.  Trulieve also highlighted its recent acquisition of Harvest Health & Recreation, noting that Harvest reported its first quarter revenue of $88.8 million and Adjusted EBITDA of $26.9 million. Trulieve said it was buying Harvest for $1.2 billion.  The combined businesses will have operations in 11 states, comprised of 22 cultivation and processing facilities with a total capacity of 3.1 million square feet, and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.


Debra BorchardtMay 10, 2021
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Trulieve Cannabis Corp.  (OTC: TCNNF) is buying  Harvest Health & Recreation Inc.  (OTCQX: HRVSF) in a deal valued at approximately $2.1 billion based on the closing price of the Trulieve Shares on May 7, 2021. The combined businesses will have operations in 11 states, comprised of 22 cultivation and processing facilities with a total capacity of 3.1 million square feet, and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.

“Today’s announcement is the largest and most exciting acquisition so far in our industry, creating the most profitable public multi-state operator.  Importantly, our companies share similar customer values with a focus on going deep in core markets. This combination offers us the opportunity to leverage our respective strong foundations and propel us forward with an unparalleled platform for future growth,” stated Kim Rivers, Chief Executive Officer of Trulieve. “Harvest provides us with an immediate and significant presence in new and established markets and accelerates our entry into the adult-use space in Arizona.  Trulieve and Harvest are leaders in our markets, recognized for our innovation, brands, and operational expertise with true depth and scale in our businesses. We look forward to providing best-in-class service to patients and customers on a broader national scale as we create an iconic US cannabis brand.”

The most directly comparable GAAP financial measure for Adjusted EBITDA is Net Income (loss), which on a combined basis for Trulieve and Harvest for the fiscal year ended December 31, 2020, was $3.4 million. The combined adjusted EBITDA for 2020 would be $250 million. 

Terms of the Deal

Trulieve will acquire all of the issued and outstanding Harvest Shares, with each Harvest Shareholder receiving 0.1170 of a Trulieve Share for each Harvest Share, implying a price per Harvest Share of US$4.79, which represents a 34% premium to the May 7, 2021 closing price of the Harvest Shares. Harvest Shareholders will hold approximately 26.7% of the issued and outstanding pro forma Trulieve Shares (on a fully diluted basis). There is a $100 million reciprocal termination fee under certain circumstances and reciprocal expense reimbursement provisions under certain circumstances.

Harvest Health 

“We are thrilled to be joining Trulieve, a company that has achieved unrivaled success and scale in its home state of Florida,” said Steve White, Chief Executive Officer of Harvest.  “As one of the oldest multi-state operators, we believe our track record of identifying and developing attractive market opportunities combined with our recent successful launch of adult-use sales in Arizona will add tremendous value to the combined organization as it continues to expand and grow in the coming years.”

Trulieve has been delivering a steady flow of earnings and has been methodically expanding its reach beyond Florida. Harvest Health, however, has had a string of acquisitions, some of which closed, while others were terminated or resold. While the companies revenues had been increasing, so has its debt. Harvest ended the third quarter of 2020 with approximately $63 million in cash and $294 million in debt. The company said it had sufficient capital to service its debt in 2020 and 2021. On October 28, Harvest completed a bought deal financing, raising gross proceeds of approximately $34.5 million. Debt service for the remainder of the year is approximately $15.2 million and the company extended the debt maturity of $6.5 million due in October 2020, by one year to October 2021.


Debra BorchardtApril 13, 2021
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Florida-based Trulieve Cannabis Corp .  (OTCQX: TCNNF) is continuing its expansion efforts and the latest state to plant its flag is West Virginia. Trulieve has acquired Solevo Wellness West Virginia LLC (“Solevo”) and its three West Virginia dispensary permits for $650,000. Solevo was awarded two permits in Morgantown and one in Parkersburg in January 2021 as part of the West Virginia application process.

“This acquisition enables Trulieve to broaden and solidify our position in the newly created West Virginia market. Solevo was granted three dispensaries as part of the application process entered by the company before becoming part of the Trulieve family. Adding Solevo to our production and dispensary permits, as well as our recently announced definitive agreement to acquire Mountaineer Holdings and its cultivation and dispensary permits, will create a fully vertical presence in the state with nine dispensaries,” said Kim Rivers, CEO of Trulieve. “We look forward to providing the highest level of cannabis products and customer experience through authentic and reciprocal relationships to West Virginia patients.”

West Virginia Has  A Long Way To Go

West Virginia is currently a medical-only state and at this time residents can only register for access to medical marijuana. The state still needs to partner with a testing lab before any products will be available for sale. Patients have to have approval from a doctor and so far, only 30 physicians in the state are eligible to approve a person for medical marijuana. It was four years ago that medical marijuana was legalized in the state, but patients still can’t get it. The state has managed to issue licenses for growers, processors, and dispensaries.

Recently legislators were unable to pass a law decriminalizing adult-use cannabis as fears of such a move meant full legalization.

Matt Simon, a senior legislative analyst for the Marijuana Policy Project, told The Center Square, “Patients in West Virginia have been waiting a long time for safe, legal access to medical cannabis. It has been nearly four years since Gov. Justice signed the medical cannabis bill into law, and there’s no reason the rollout should have taken this long. Other states have been able to implement similar programs in a fraction of the time it has taken West Virginia. Still, the fact that dispensaries have finally been licensed and patients are finally able to register for the program is an important step forward. We look forward to the day that patients will finally be able to obtain medical cannabis from dispensaries in West Virginia.”


StaffApril 9, 2021
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FRANKLIN SQUARE, NY -April 9, 2021 /AxisWire/ With the 50th anniversary of ‘420’ just around the corner, Trulieve, Florida’s largest chain of medical marijuana treatment centers, is celebrating one year of collaboration with celebrity country music band “The Bellamy Brothers.”

In 2020, Trulieve created a new brand called the “Old Hippie Stash.” The Bellamy Brothers David and Howard hand selected attributes for three stains of medical cannabis.

The three strains of medical marijuana available only at Trulieve are “Reggae Cowboy,” “Afterglow,” and “Big Love.” The Reggae Cowboy and Big Love strains are Sativa hybrids, while Afterglow is a straight Indica to promote relaxation and can help with pain relief.

Valda Coryat, Trulieve’s Chief Marketing Officer, along with David and Howard Bellamy (The Bellamy Brothers) were interviewed by Lori Reese of MarijuanaDoctors.com via Zoom. The live interview shares a candid discussion that fans will want to hear. From life on the “Honky Tonk Ranch” to the changing role of medical cannabis as an alternative medicine. The award-winning musical duo also talks about the country music talents that were lost due to COVID-19, and their songs about the pandemic, including “Rednecks Looking for Paychecks” and “No Country Music for Old Men.” A tribute to Kenny Rogers, Charlie Pride, and other legendary country crooners.

The one-year anniversary of the “Old Hippie Stash” is April 9th. The Bellamy Brothers and Trulieve are celebrating by giving away 15 gift boxes for fans. Participants (USA only and 21-years of age and older) can enter on the MarijuanaDoctors.com blog post about the interview: https://www.marijuanadoctors.com/blog/bellamy-brothers-1st-anniversary-interview/

Winners will be randomly selected and announced by MarijuanaDoctors.com on Facebook, on Monday April 12th.

—————————————-

MarijuanaDoctors.com is America’s original online resource for medical cannabis information — Since 2010! Patients who want to get their medical card can find practitioners in each of the thirty-six states where medical marijuana is legal. Find a doctor & get your card. Learn if telemedicine medical card health evaluations are available in your state, at MarijuanaDoctors.com.

Contact:

Vincent B. Donadio

Marketing Director

Marijuana Doctors

donadio@marijuanadoctors.com

(516) 217-2712


StaffApril 9, 2021
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In 2020, Trulieve created a new brand called the “Old Hippie Stash.” The Bellamy Brothers David and Howard hand selected attributes for three stains of medical cannabis.

With the 50th anniversary of ‘420’ just around the corner, Trulieve, Florida’s largest chain of medical marijuana treatment centers, is celebrating one year of collaboration with celebrity country music band “The Bellamy Brothers.”

The three strains of medical marijuana available only at Trulieve are “Reggae Cowboy,” “Afterglow,” and “Big Love.” The Reggae Cowboy and Big Love strains are Sativa hybrids, while Afterglow is a straight Indica to promote relaxation and can help with pain relief.

Valda Coryat, Trulieve’s Chief Marketing Officer, along with David and Howard Bellamy (The Bellamy Brothers) were interviewed by Lori Reese of MarijuanaDoctors.com via Zoom. The live interview shares a candid discussion that fans will want to hear. From life on the “Honky Tonk Ranch” to the changing role of medical cannabis as an alternative medicine. The award-winning musical duo also talks about the country music talents that were lost due to COVID-19, and their songs about the pandemic, including “Rednecks Looking for Paychecks” and “No Country Music for Old Men.” A tribute to Kenny Rogers, Charlie Pride, and other legendary country crooners.

The one-year anniversary of the “Old Hippie Stash” is April 9th. The Bellamy Brothers and Trulieve are celebrating by giving away 15 gift boxes for fans. Participants (USA only and 21-years of age and older) can enter on the MarijuanaDoctors.com blog post about the interview: https://www.marijuanadoctors.com/blog/bellamy-brothers-1st-anniversary-interview/

Winners will be randomly selected and announced by MarijuanaDoctors.com on Facebook, on Monday April 12th.

 


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