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.”
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.
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.”