Curaleaf vs. Trulieve: Which Cannabis Company Will Generate More Revenue in 2022?

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Trulieve's acquisition of Harvest Health puts it in a neck-and-neck race with Curaleaf.

Today, two of the top companies in the marijuana industry are Curaleaf Holdings (OTC:CURLF) and Trulieve Cannabis (OTC:TCNNF). Both are cannabis producers with a presence in many states across the country, and they generated similar revenue in their most recent quarterly results. Trulieve has gotten a big boost due to its recent acquisition of Harvest Health, which closed last year and gave the company many more growth opportunities.

Below, I'll look at which business will likely bring in more revenue in 2022. That could be key in determining which stock generates better returns for its investors.

The companies are both generating over $316 million in quarterly revenue

For the period ending Sept. 30, 2021, Curaleaf reported third-quarter sales of $317.1 million. That rose by 74% year over year, although on a quarter-over-quarter basis, it represented an increase of just 2% as the company noted some "transient headwinds" during the period. The company remains on track to post at least $1.2 billion in annual revenue for all of 2021. That would nearly double the $627 million it recorded in 2020. 

Trulieve, meanwhile, said that its net sales totaled $224.1 million in Q3 (covering the same time frame as Curaleaf) and grew by 64% year over year. If you include Harvest Health's results into the mix, then Trulieve's number reaches $316 million, coming in just shy of Curaleaf's tally. Since the transaction was only completed on Oct. 1, 2021, just after the period's close, Harvest Health's sales numbers won't officially be included in Trulieve's results until the following quarter.

Both Curaleaf and Trulieve are likely to post similar sales numbers in 2022, and predicting which company will come out on top depends on multiple factors.

The case for Curaleaf

A big advantage for Curaleaf is that the company is generally more aggressive in its growth than Trulieve is. The Massachusetts-based company is in 23 states across the country. Last month, it announced the $211 million acquisition of Bloom Dispensaries, which owns four dispensaries in Arizona. Once that deal closes (which could happen as early as this month), along with a few other pending transactions Curaleaf has, the company's total dispensary count will top 128, with 16 of those in Arizona.

That's important because Arizona has been a top market for Trulieve since its acquisition of Harvest Health, which is based out of Tempe, Arizona, and has a strong footprint there. Also, last month, Trulieve announced it was acquiring the PurpleMed Healing Center in Tucson, Arizona. With that transaction, Trulieve will own the 17th location in the state. It looks like a battle is heating up between the two companies there.

That's not the only state where Curaleaf is battling Trulieve head-to-head. On Dec. 21, 2021, Curaleaf announced that it would be opening four more dispensaries in Florida -- Trulieve's home state. With 42 locations, that's not even half the number Trulieve has in that state. But it could put a dent in its sales and thus pave the way for Curaleaf to outperform. If Trulieve has more of a fight on its hands in its two key states, Arizona and Florida, Curaleaf might stand a better chance of generating more revenue this year. 

The case for Trulieve

Trulieve is the dominant force in Florida, with 112 dispensaries in that state alone. Its recent acquisition of PurpleMed will put its total dispensary count at 160. 

Unlike Curaleaf, which has been expanding rapidly into multiple states, Trulieve has only recently been making significant moves outside of Florida. While Harvest Health is generating strong revenue already, there are multiple markets where Trulieve is still in its early stages. When it reported its latest quarterly results on Nov. 15, 2021, it reported that it had only commenced its wholesale operations in Massachusetts. That's a top marijuana market (the state's cannabis-related revenue will be well over $1 billion for 2021) that could lead to significant growth for Trulieve in 2022. 

In the northeast region (which, in addition to Massachusetts, includes West Virginia, Pennsylvania, Connecticut, and Maryland), the company reported having 26 stores as of its Q3 results. That is more than the 21 locations it had in the southwest region (which includes its large presence in Arizona through the Harvest Health acquisition).All those new locations outside of Florida have the potential to drive some new growth for Trulieve this year and push its top line past Curaleaf's in 2022.

Curaleaf looks more likely to be the winner

Although I expect the top lines of both companies will be close this year, I believe Curaleaf will come out ahead. The company continues to grow its presence in Florida and Arizona, and wrestling away market share from Trulieve could be a key move in ensuring that Curaleaf's revenue grows at a higher rate than the Florida-based marijuana producer. Plus, although Trulieve has been in multiple markets for a while now, there's been nothing to indicate its success in markets outside of Florida. Even though it is in 11 states, it continues to focus on Florida. In December 2021, it announced the opening of four new locations -- all of which were in its home state.

Trulieve's operations are certainly more diverse with the acquisition of Harvest Health. Still, the company remains focused on one state rather than expanding its reach in other parts of the country. If it's still depending heavily on Florida this year, a market that Curaleaf is also zeroing in on, that could hurt its chances of being the top marijuana stock in 2022.

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