Trulieve Cannabis Corp (TCNNF)

[FUNMAN]

Listen to pod cast - Trulieve: The Confidence That Profit Brings (Podcast)
Aug. 27, 2020 12:00 PM ET

The Cannabis Investing Podcast
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Summary

* Trulieve recently reported earnings and is getting a lot of shareholder love - we take a deeper dive into the numbers in a frank conversation with CEO Kim Rivers.

* We talk growth despite onerous banking regulations, incremental momentum on 280E, why discipline matters and building a hub model across the US.

* We also discuss issuing debt and the salient lesson that capital markets aren't always available so can't rely on them to run your business.

Listen to the podcast here:

https://seekingalpha.com/article/4371119-trulieve-confidence-profit-brings-podcast?utm_medium=email&utm_source=seeking_alpha&mail_subject=tcnnf-trulieve-the-confidence-that-profit-brings-podcast&utm_campaign=rta-stock-article&utm_content=link-2

By Rena Sherbill

Trulieve (OTCQX:TCNNF) reported earnings a couple weeks ago and has recently been getting a lot of shareholder love - we take a deeper dive into the numbers and behind the success of one of, if not the, top MSOs in the cannabis space in a frank conversation with CEO Kim Rivers.
Topics include:

• 5:00 - Still focused on SAFE Banking regulations though many unknowns remain about the Stimulus Bill - which would allow banks to freely bank with cannabis businesses. Most companies, Trulieve included, currently using only state-chartered banks or credit unions because cannabis still not federally legal. Trulieve did a debt raise recently - at great 'cannabis rates' but still in excess of 9% interest rate while smaller, less healthy companies can get much more attractive rates with bigger banks. 280E tax code a separate, but also highly onerous, regulatory challenge for cannabis companies. Amazing how well some companies have done despite these hurdles.

• 8:30 - Issuing debt vs issuing stock. Trulieve motivated not to dilute long-term shareholders value. Securing real public debt - without onerous convert feature or early payback terms - at some of the best rates in the industry seemed the best way to do it. Believe Trulieve is undervalued vs peers so issuing shares at price points that were undervalued came into play. When SAFE Banking comes into play, there will be further options given strength of balance sheet.

• 15:00 - Changing to GAAP reporting because had foreign private issuer status when Trulieve executed on RTO (more than 50% of shareholders don't live in US); that's no longer true (shareholders are now over 50% in the US) so now there's a requirement to register with the SEC. Have always been transparent, comparing IFRS to GAAP, GAAP provides a level of clarity that makes sense for where they are now. Also becoming SOX compliant, which gives another layer of fiscal responsibility.

• 18:00 - Building a company where financial discipline matters as well as building corporate culture where employees are valued. Important for Kim to lead by showing up. Increasing healthcare access during Covid.

• 26:00 - Retail picture will still be important even if/when cannabis gets legalized. People still want in-store experience and expertise. Even when cannabis is legalized it won't be a simple broad end to prohibition; it will likely differ state to state. The bigger question is the ability to move cannabis across state lines. Down the line brick and mortar may become less prevalent, for Trulieve, they're building expertise in e-commerce and delivery but brick and mortar experience still valuable. Pre Covid data vs Covid data.

• 36:00 - Ongoing libel suit against Grizzly Research delayed due to Covid. Response to any of the critics - execution is key, standing behind their business and shareholder value.