Trulieve Cannabis Corp. on Wednesday swung to a loss and cut its revenue outlook for the year as inflation impacted its prospects and softness in wholesale markets weighed on results.
The Tallahassee, Fla.-based cannabis company lowered its 2022 revenue estimate by 5% from the low end of prior guidance to a range of $1.25 billion to $1.30 billion.
“Factoring in strategic changes across our business, the impact of inflation on consumer spending, softness in wholesale markets, and the lack of visibility in the current macroeconomic environment, we are adjusting 2022 revenue guidance,” the company said.
said it lost $22.5 million or 12 cents a share in the second quarter, after posting net income of $40.9 million, or 31 cents a share, in the year-ago quarter.
The company’s adjusted loss for the quarter was a penny a share, compared to adjusted income of 35 cents a share in the year-ago quarter.
With a boost from organic retail sales and the benefit of its Harvest acquisition in Oct., 2021, revenue rose 49% to $320.3 million from $215.1 million.
The company matched the Wall Street estimate for a loss of a penny share, and fell slightly short of the $322.0 million revenue view, according to FactSet data.
Retail revenue rose 3% to $298.6 million and wholesale, licensing and other revenue fell by 22% sequentially to $21.7 million.
“Trulieve has the capital, discipline, and experience to navigate short term headwinds and emerge as a stronger company,” CEO Kim Rivers said in a prepared statement.
Trulieve ended the quarter with activity in 11 U.S. states, but it plans to discontinue wholesale operations in Nevada. It’s currently weighing options to exit the market.
However, it’s expanding in Arizona, where it has opened seven new dispensaries.
At last check, its overall footprint includes 75 retail dispensaries and more than 4 million square feet of cultivation and processing capacity.
Trulieve said it made an initial contribution to the Smart and Safe Florida campaign to introduce a statewide ballot in November, 2024, to allow adult use cannabis sales in the Sunshine State.
Trulieve shares are down 49% so far in 2022, while the AdvisorShares Pure US Cannabis ETF
has fallen 54% and the S&P 500
has dropped by 13.5%.