Trulieve, Green Thumb, Verano stocks rise on stronger-than-expected Cannabis revenue
Trulieve posts narrower loss while Green Thumb draws analyst praise as ‘best in class’.
Trulieve Cannabis Corp., Green Thumb Industries Inc. and Verano Holdings Corp. all topped revenue estimates for the fourth quarter, as the cannabis companies opened new stores and more states rolled out medical and adult-use programs.
Trulieve led gains in the three cannabis stocks on Thursday, while Green Thumb Industries GTBIF, -1.49% distinguished itself as the only U.S. cannabis company to report net income in the quarter, thus far.
Cannabis stock have been buoyed in 2024 partly by the expectation that the U.S. Drug Enforcement Administration would re-schedule cannabis to Schedule III from Schedule I in a move that could result in significantly lower tax payments. For its part, Trulieve said Thursday the change would save it hundreds of millions of dollars over the next few years.
Meanwhile, more states continue to allow adult-use and medical cannabis, as well. In one closely-watched development, the Florida Supreme Court is expected to rule on whether a ballot question could be placed on the ballot in November to roll out adult-use cannabis sales in the Sunshine State.
Analyst Aaron Grey of Alliance Global Partners reiterated a buy rating on Green Thumb Industries and upped his price target for the stock to C$25 ($18.39) from $C23.
“We continue to see GTI as demonstrating itself as best-in-class among multi-state operators, well positioned to capitalize in the existing market, as well as future opportunities,” Grey said in a research note.
Green Thumb is poised to benefit from beginning and ramping up of adult-use sales in Minnesota, New York and Ohio along with potential adult-use legalization in Florida, Pennsylvania and Virginia, he said.
After the closing bell on Wednesday Green Thumb Industries said its fourth-quarter profit totaled $3.2 million or a penny a share. In the year-ago quarter, Green Thumb Industries lost $51.2 million, or 22 cents a share.
Analysts expected Green Thumb Industries to earn 5 cents a share.
Green Thumb’s revenue rose 7% to a record $278.2 million, well ahead of the estimate of $270.5 million.
The Chicago-based company also approved an additional $50 million to repurchase shares.
Green Thumb Industries Chief Executive Ben Kovler said the fourth quarter was ”strong” as the company opened seven Rise dispensaries including one in New York and six in Florida.
Green Thumb Industries stock moved up by nearly 4%.
Prior to Thursday’s trades, Green Thumb Industries stock has risen by 12.8% in 2024, compared to a 24.8% increase by the AdvisorShares Pure U.S. Cannabis ETF MSOS, -1.71%.
Trulieve posts narrower loss
Trulieve TCNNF, -1.22% said its fourth-quarter loss narrowed as the Florida-based cannabis specialist exited California and Massachusetts while launching adult-use cannabis businesses in Connecticut and Maryland and opening new medical dispensaries in Georgia and Ohio.
Trulive’s stock was rallying by 7% on Thursday.
Trulieve said its fourth-quarter loss dropped to $33.4 million, or 18 cents a share, from a loss of $77 million, or 41 cents a share, in the year-ago period.
Adjusted loss of 12 cents a share came in a penny ahead of the FactSet consensus estimate for a loss of 13 cents a share. Fourth-quarter revenue fell to $287 million from $298.5 million, in the year-ago quarter, but topped the analyst estimate of $268.8 million.
Looking ahead, Trulieve expects first-quarter revenue to be “similar” to the fourth quarter’s figure of $287 million, which would put it ahead of the analyst estimate of $268.6 million.
In 2023, Trulieve opened 17 dispensaries and increased its retail footprint to 192 locations.
Prior to Thursday’s trades, Trulieve’s stock has risen by 88% in 2024.
Verano net loss drops about by two thirds
Verano VRNOF, -3.67% said its fourth-quarter loss dropped to $72.6 million from $216.1 million in the year-ago period.
The company did not release loss-per-share figures.
Fourth-quarter revenue at Chicago-based Verano increased by 5% from the year-ago period to $237.2 million, ahead of the FactSet consensus estimate of $235.8 million.
Verano said its revenue benefitted from strength in its wholesale adult-use sales in New Jersey, as well as growth in Maryland and Florida.
Verano’s stock was up by 2.1% on Thursday.
Prior to Thursday’s moves, Verano’s stock has risen 20% so far in 2024.
