Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) announced its financial results for the fourth quarter and full year ending on Dec. 31, 2022. In the fourth quarter, Trulieve delivered revenue of $302 million, with 2% retail revenue growth and 96% of revenue from retail sales.
This fell by 1% from $305 million in the same time period in 2021 and missed the Yahoo Finance estimate for revenue of $304 million. However, it improved sequentially from the third quarter’s revenue of $301 million.
The company also reported a net loss of $77 million and an adjusted net loss of $35 million excluding non-recurring charges, asset impairments, disposals, and discontinued operations. This was higher than last year’s net loss of $72 million for the same time period in 2021. The adjusted loss for earnings was ($0.18) which was higher than the Yahoo Finance average analyst estimate of ($0.11).
For the full year of 2022, Trulieve’s revenue increased by 32% over 2021 to $1.2 billion. The company attributed the increase in revenue to contributions from acquisitions, most notably, Harvest Health & Recreation in October 2021 and Anna Holdings also known as Keystone Shops in July 2021, continued expansion into new states such as Massachusetts and West Virginia, and additional dispensaries opened in existing markets.
“Trulieve has grown to surpass $1.2 billion in revenue in less than seven years, a notable milestone and a testament to the agility of our team,” said Kim Rivers, Trulieve CEO. “Our success is the culmination of thoughtful intention, superb execution, and best in class capabilities for rapid growth.”
The company also delivered a GAAP net loss of $246 million and an adjusted net loss of $30 million, which excludes non-recurring charges, asset impairments, disposals, and discontinued operations, associated with the Harvest acquisition and strategic repositioning of assets to improve cash flow. The company had a net income in 2021 of $18 million.
Trulieve said in its filings, “A significant factor in the decrease in net income is the Company’s repositioning and continued work to streamline our cultivation and production facilities and the markets in which we operate. This resulted in a loss on the disposal of long-lived assets and non-operating assets of $75.5 million. The Company expects to continue to incur such costs in the near term as we continue to focus on streamlining our business and the markets in which we operate or may enter into. The increase in sales and marketing expenses, general and administrative expenses, depreciation and amortization, and interest expense were also factors in the decreased net income.”
On a positive note, the company’s cost of goods sold fell from $170 million in the fourth quarter of 2021 to $150 million in 2022. This led to a better gross profit of $149 million versus $134 million.
Sales and marketing expenses for the year were $284.9 million, an increase of $69.8 million, or 32% from $215.1 million for 2021, but remained consistent as a percentage of revenue. The increase in sales and marketing is the result of a higher headcount for the year, as the company continues to add additional dispensaries.
Cash and cash equivalents were $212.3 million as of December 31, 2022.
Rivers continued, “With increasing mainstream support and meaningful regulatory reform on the horizon, tremendous growth opportunities lie ahead for U.S. legal cannabis. In 2023, we are laser focused on cash generation while investing to build a sustainable company designed to thrive in an integrated commerce environment.”