Adam JacksonTrulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) announced a net loss despite significant revenue from retail sales for the first quarter ending March 31.
The U.S.-based cannabis giant reported a revenue of $289 million for the quarter, with 95% resulting from retail sales. This missed the Yahoo Finance average analyst estimate for sales of $292 million.
Trulieve achieved a GAAP gross margin of 52%, leading to a gross profit of $150 million, but net loss was $64 million. The adjusted net loss, which excludes nonrecurring charges, asset impairments, disposals, and discontinued operations, stands at $21 million.
Kim Rivers, Trulieve CEO, said the company is focused on cash preservation and generation, preparing for the next phase of accelerated growth.
“Trulieve’s scale and service, operational flexibility, and strong balance sheet are essential for success in the current environment,” she said in a statement.
The company cut its selling, general, and administrative expenses by $24 million sequentially to $102 million. This reduction contributed to an adjusted EBITDA of $78 million or 27% of revenue. Trulieve ended the quarter with $195 million in cash.
One area that accounted for a loss in sales was the termination of the loyalty program associated with dispensaries acquired with the acquisition of Harvest Health & Recreation in October 2021. As a result of the move, the company recorded a reduction in the accrual of $4.7 million in revenue, net of discounts in the condensed consolidated statements of operations, and comprehensive (loss) income.
Trulieve opened three new dispensaries during the quarter, in:
- Palatka, Florida
- Winter Haven, Florida
- Beckley, West Virginia
Trulieve also began adult-use sales in Bristol, Connecticut.
The company also said it became the first U.S. cannabis company to launch advertising campaigns on Twitter legally.
By quarter’s end, Trulieve operated in 11 states, with 32% of its retail locations outside of Florida. Overall, Trulieve operates 186 retail dispensaries and more than 4 million square feet of cultivation and processing capacity in the U.S.
Recently, Trulieve launched medical sales in Georgia, opening two new dispensaries in Macon and Marietta. The company reported record traffic, customers served, and units sold on April 20, showing increases of 10%, 11%, and 9%, respectively, compared with the same date last year.
Rivers emphasized the increasing adoption and expanding state-level access to cannabis, saying the industry is “well beyond the tipping point” and sees significant opportunities ahead for companies that can roll with industry whipsaws.
