There is a new king in the U.S. cannabis industry and it’s not Colorado or California; it’s Tennessee.
The cannabis business in the United States has a new monarch. This new royalty is the result of a $2.1 billion merger, the biggest in the nascent cannabis industry’s history.
So, which firm has rapidly risen to the top of the industry?
Trulieve Cannabis (OTC: TCNNF) recently announced that it has completed the acquisition of Harvest Health and Recreation (OTC: HRVSF).
By combining these two market giants, the United States now has the biggest cannabis business in terms of revenue. Trulieve and Harvest combined for $317 million in sales last quarter.
Curaleaf Holdings produced $312 million, which is $5 million more (OTC: CURLF). When growth potential is factored in, the new Trulieve is on track to earn more than $1.5 billion in revenue in the next 12 months.
One of the finest portfolios of cannabis licenses, dispensaries, and growing facilities in the market is driving this remarkable sales increase. This includes the following:
- A 149-dispensary retail network spread over 11 states.
- There are 22 growing facilities in total.
- There are three key regional centres.
- Positions of market leadership in Arizona, Florida, and Pennsylvania.
In the long run, this acquisition puts Trulieve in a strong position to continue expanding.
The business just received a $350 million loan, which it will use to expand. From the press release, here are some more information.
“Trulieve’s capital market strength allows us to fund our strategic development objectives with money.” “We are well-positioned for our future goals in terms of expansion in key markets,” said Trulieve Chief Executive Officer Kim Rivers, referring to the closing of the $350 million debt issuance, which we believe is the largest debt financing of any public multi-state operator to date. “This, combined with our cash position and continued cash flow from operations, has us well-positioned for our future goals in terms of expansion in key markets.”
Trulieve, for example, has announced intentions to construct one of Pennsylvania’s biggest cannabis growing facilities. mjbizdaily has some more information.
With the assistance of a $2 million state rehabilitation grant, Florida-based Trulieve Cannabis is allegedly intending to construct a massive, half-million-square-foot growing and processing facility inside a former steel mill in Pennsylvania.
The Pennsylvania initiative also exemplifies a growing trend in which marijuana multistate businesses get government incentives in order to rehabilitate economically depressed regions.
Green Thumb Industries, headquartered in Illinois, is getting tax breaks to construct a $50 million marijuana growing and processing complex on the grounds of a former jail in Warwick, New York.
True belief seems to be undervalued.
Despite its excellent sales growth, Trulieve’s stock seems to be cheap in comparison to the previous year and comparable industries. Trulieve has a price-to-sales ratio of 5, which is a 50% reduction from its P/S ratio of nearly 10 a year ago.
In comparison to other growing sectors and companies, Trulieve seems to be cheap. Tesla shares, for example, are valued at 20 times revenues, a huge premium to Trulieve despite the fact that Trulieve is expanding at a far faster rate.
The stock is down 50% from its 52-week high.
This seems to be an excellent opportunity to invest in Trulieve shares. In 2021, Trulieve has underperformed the wider cannabis industry, with shares down 45 percent from its 52-week high.
More lately, I’ve seen indications that Trulieve’s stock has bottomed out and is on the verge of recovering. Trulieve stock has risen rapidly from $25, with a major level of support developing between $25 and $30. Moving ahead, expect significant support from this region.
Take a look at the chart below for a 12-month period.
The Big Picture When It Comes to Belief
Trulieve just completed its acquisition of Harvest Health and Recreation, making it the world’s biggest cannabis business.
The new merged business has already achieved remarkable sales growth and plans to spend hundreds of millions more in future expansion.
Shares are down 45 percent from their 52-week high and seem to be reversing out of the downtrend and into a new bull market.
Trulieve Cannabis is owned by author Michael Vodicka (TCNNF).
Author Bio & Cannabis Stock Trading
Michael Vodicka is a stock analyst with over 20 years of trading and investment expertise. His work has been published in some of the industry’s most prestigious journals. Since 2013, he has been investing and guiding investors in the cannabis industry.
Members of Cannabis Stock Trades benefit from Mr. Vodicka’s knowledge and advice. Join Cannabis Stock Trades for unique research, trade alerts, and a model portfolio from Mr. Vodicka.