Trulieve CEO talks about growth through mergers and acquisitions, federal pot reform
LOS ANGELES – The expansion of the legal marijuana market in the United States is helping to generate strong sales and profit growth for multi-state operators such as Trulieve Cannabis Corp.
Trulieve CEO Kim Rivers recently spoke to The Associated Press about the impact of the recently concluded $ 2.1 billion deal for the Tempe, Ariz.-Based cannabis company Harvest Health & Recreation. of how his business weathered the pandemic and the need for a pro-cannabis federal government. legislation. It reported $ 408.9 million in revenue in the first half of this year, a jump of 89% from the same period of 2020. Its net profit jumped 67% in the same period.
Trulieve’s latest expansion offer comes as more states allow the sale of marijuana in one form or another.
The company has dispensaries throughout Pennsylvania, including Philadelphia, the King of Prussia, and Devon. The company’s shares closed down 1.03% at $ 25.95 in over-the-counter trading. Over the past year, the stock has traded in a range of $ 21 to $ 53.73.
The recreational use of marijuana by adults is now legal in 19 states, with Connecticut, New Mexico and Virginia being among those that enacted such laws this year.
Despite this, the cannabis industry remains limited by legal barriers to accessing capital and other challenges stemming from the fact that marijuana is illegal at the federal level. The industry is hoping Congress will pass long-sought legislation, including the Secure and Fair Enforcement (SAFE) Banking Act, which would allow banks to do business with licensed marijuana companies.
The interview has been edited for length and clarity.
Q: You called your business expansion plan a “hub strategy”. What does this imply?
A: It means dividing the country into five regions: Southeast, Northeast, Southwest, Center and Northwest. And to capitalize not only on the short-term catalysts that are likely to occur at the state level, but also to reflect on how our distribution platform will look as the federal shift occurs. We started on the development path of the North East. We acquired two companies in Pennsylvania, started operating in Massachusetts as well as Connecticut, and decided to broaden our horizons because we felt we were then positioned to embark on a more transformational acquisition. This is when Harvest became the focus.
Q: How does the Harvest acquisition fit in?
A: Harvest is expanding this national hub strategy by increasing our footprint in the Southeast with additional sales, production and retail outlets in the state of Florida, as well as in the Northeast. We will have one of the largest combined footprints in the state of Pennsylvania, as well as the addition of a new state, Maryland, to our portfolio and the addition of a whole new region to our combined platform. in the southwest. We will be the biggest company from a retail point of view. We have 149 locations and on the growing and production side of the business we have 3.1 million square feet, which is about 50% more than any of our competitors.
Q: The House recently re-passed the SAFE Banking Act. How important would this bill be if it became law?
A: There is a significant increase in costs for those of us who are currently involved in capital markets. But what is perhaps more important is the fact that a lot of the small businesses that are cannabis companies cannot get loans at all because they don’t have that pool of capital at their disposal. At this point, it almost seems ludicrous that a majority of our states have cannabis programs, but banks that are determined to participate in the industry cannot and do not have protection due to the federal stance on cannabis. industry.
Q: What impact has the pandemic had on your business?
A: We have seen consumer trends increase quite significantly. We achieved record growth of around 25% quarter over quarter which had a significant positive impact on the business. What we are seeing now is normalization, of course, post-COVID. And what’s really exciting, I think for a lot of us, is that we’re still seeing growth even outside of these highs.