WEBVTT - Trulieve Sees Strong Growth, Weaker Earnings

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So we

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<v Speaker 1>did see some gains and movement, actually wide swing, about

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<v Speaker 1>a six or seven percent swing in cannabis stocks today

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<v Speaker 1>as the US House of Representatives is expected to approach

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<v Speaker 1>a vote on a bill that would decriminalize marijuana. And

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<v Speaker 1>keeping with that, we also got a financial update on

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<v Speaker 1>one of the companies in the space we're talking about,

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<v Speaker 1>Truly Cannabis out this morning. Fourth quarter revenue inline adjusted

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<v Speaker 1>EBITDA a miss and the company's forecast mr analyst forecast

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<v Speaker 1>based on Bloomberg data. The stock, we did see some

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<v Speaker 1>movement in it as well, finishing kind of unchanged on

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<v Speaker 1>the day after an earlier rally. Yeah, a little bit

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<v Speaker 1>of allatility when it comes to cannabis stocks. I think

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<v Speaker 1>that's an understatement over the last year. Kim Rivers is

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<v Speaker 1>CEO of Truly. If she joins us on the phone

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<v Speaker 1>from for via zoom excuse me from Tallahassee, Florida. Kim,

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<v Speaker 1>good to chat with you again. Um, let's start with

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<v Speaker 1>the quarter and then we'll move into the legislation that's well,

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<v Speaker 1>perhaps making its way through Congress because we've we've seen

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<v Speaker 1>this story before. UM fourth quarter earnings reporting record revenue

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<v Speaker 1>of ninety eight million dollars, up eight percent year over year. UM,

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<v Speaker 1>give us your takeaway from the quarter. Yeah, well, first

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<v Speaker 1>of all, thank you so much for having me and UM,

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<v Speaker 1>you know, it was a phenomenal quarter for truly, I'm

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<v Speaker 1>really proud of our team. UM of course ended the

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<v Speaker 1>year up eighty percent, following UM a year of a

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<v Speaker 1>hundred and five percent growth the year before, so two

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<v Speaker 1>consecutive years of just of just you know, really incredible

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<v Speaker 1>incredible growth top line bottom line finished UM ibadad which

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<v Speaker 1>again this is the strongest in the in the industry. UM.

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<v Speaker 1>We of course completed the largest cannabis acquisition to date,

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<v Speaker 1>closing our acquisition of Harvest Health and Recreation in October.

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<v Speaker 1>So how much remind me how that was? For that

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<v Speaker 1>was UM, well, it's the headline number was two was

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<v Speaker 1>two billion. UM. We did to share exchange ratio, so

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<v Speaker 1>it ended up coming in UM a bit under that

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<v Speaker 1>given the given the as you mentioned, volatility in the market,

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<v Speaker 1>UM coming into your d um so and it took

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<v Speaker 1>our portfolio from four states. UM and we entered in

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<v Speaker 1>the to exiting the year with eleven states and an

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<v Speaker 1>impressive retail leading network of a hundred and fifty nine

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<v Speaker 1>store locations and cultivation and production um north of three

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<v Speaker 1>point five billion square feet. So how has this story

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<v Speaker 1>around and the reality in terms of the cannabis market?

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<v Speaker 1>You know? Can I feel like we've been talking about

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<v Speaker 1>it for several years, right, We've all been excited about it,

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<v Speaker 1>UM waiting for more you know, kind of regulatory oversight,

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<v Speaker 1>legitimization here. And it does feel like there was a

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<v Speaker 1>momentum earlier in the day out of expectations that the

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<v Speaker 1>House is expected to do a vote on a bill

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<v Speaker 1>this week. Where are we in this process? You know,

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<v Speaker 1>from where we've come over the last couple of years

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<v Speaker 1>to where we are today? How would you describe it? Yeah? So,

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<v Speaker 1>I mean I think it's been of course, as as

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<v Speaker 1>folks who have been following cannabis would I'm sure agree,

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<v Speaker 1>a bit of a roller coaster. Um. If you know,

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<v Speaker 1>if we're if we're really looking at the macro picture

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<v Speaker 1>from a from a federal reform perspective, I want a

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<v Speaker 1>caveat that heavily by saying that UM our business and

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<v Speaker 1>other businesses like US and which our plant touching US

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<v Speaker 1>operator operators. And that's an important distinction, um, because we

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<v Speaker 1>are not able to list on the on the regular exchanges, right,

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<v Speaker 1>We're not We're not able to list on the n

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<v Speaker 1>y C or on the NASDACK And so it's always

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<v Speaker 1>a little frustrating and interesting because you see big moves

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<v Speaker 1>to the positive UM with companies that are quote cannabis companies,

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<v Speaker 1>those are actually Canadian operators with Canadian operate operations um,

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<v Speaker 1>and so they actually can't benefit from federal change UM

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<v Speaker 1>in the in the near term. Um. Yeah, those are

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<v Speaker 1>the stocks because they're the only stocks available on those

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<v Speaker 1>exchanges that see the positive gains today. But still an

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<v Speaker 1>indicator of kind of sentiment, right, like I mean, invest

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<v Speaker 1>your sentiment comes from a lot of different places. Yeah,

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<v Speaker 1>d percent, a hundred percent and so UM. What we

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<v Speaker 1>see in the other caveat, I would say is that

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<v Speaker 1>the state momentum has not slowed down. And to the

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<v Speaker 1>fundamentals of our business when we talk about any percent

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<v Speaker 1>revenue growth strong even on margins um you know, portfolio expansion, etcetera.

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<v Speaker 1>That really is grounded in the state regulatory structure that

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<v Speaker 1>is continuing to evolve in a real and meaningful way.

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<v Speaker 1>Right Maryland right now is actually in session. Expect to

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<v Speaker 1>build a pass with a follow up amendment to their

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<v Speaker 1>to their constitution around recreational cannabis. Of course, all the

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<v Speaker 1>talk out of New York and New Jersey, we've got

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<v Speaker 1>Georgia who's about to launch a medical program. A number

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<v Speaker 1>of Southern markets actually who are about to launch medical

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<v Speaker 1>are in different varying stages of launching medical programs. So

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<v Speaker 1>is that the growth is a medical or recreational Well,

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<v Speaker 1>it's both, right, so I think, you know, and it's

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<v Speaker 1>somewhat regionalized. And you know, we've articulated this regional hub strategy.

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<v Speaker 1>That's one of the reasons you know in in Southern states, Um,

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<v Speaker 1>you know we it is primarily launching medical programs to

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<v Speaker 1>start Northeast and there are there's good penetration from a

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<v Speaker 1>medical program perspective. So now it's just that that switchover

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<v Speaker 1>to recreational. Um. Of course, outwest, Um, these are our

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<v Speaker 1>legacy markets. They've been around and have both metal cool

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<v Speaker 1>and recreational sales for over a decade. So there is

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<v Speaker 1>varying parts of the country that are in various stages.

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<v Speaker 1>But to get back to your question on federal change,

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<v Speaker 1>I think the thought process was with the Democrats uh,

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<v Speaker 1>coming into into the majority in Congress, and of course

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<v Speaker 1>with the presidency, the thought was that there would be

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<v Speaker 1>meaningful change more quickly. Um. You know post election, Uh,

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<v Speaker 1>you saw stocks and rally around that that sentiment, if

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<v Speaker 1>you will, um, and and the hopes that we would

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<v Speaker 1>see something more meaningful quickly. Unfortunately that has not been

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<v Speaker 1>the case. UM. You know. There have been a number

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<v Speaker 1>of proposals that have come forward, but they haven't been

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<v Speaker 1>able to get traction in both houses. UM. The More Act,

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<v Speaker 1>as an example, which would expect to be voted on

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<v Speaker 1>again on Friday, has already passed the House previously. UM.

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<v Speaker 1>I would expect for it to have sound optimistic, Well,

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<v Speaker 1>I expected to pass again. I think the issue is

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<v Speaker 1>is that it's just as in the Senate right in

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<v Speaker 1>terms of whether or not we're going to see the

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<v Speaker 1>ability to coalesce and reach a compromise that that can

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<v Speaker 1>pass both houses. All right, we gotta run. Kim, Thank

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<v Speaker 1>you so much. Kim Rivers. She's the chief executive officer

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<v Speaker 1>of Truly via Zoom from Tallahassee