2019 might have been a pretty disappointing year for cannabis stocks due to the widespread issues with the industry, but some stocks managed to buck the trend. One of those was TRUL stock, so we're taking a closer look at Trulieve Cannabis (CSE:TRUL) (OTCQX:TCNNF) to figure out what happened in 2019 and if it can be repeated in 2020.
In 2019, TRUL stock gained over 45%. While many might be thinking that the American multi-state operator is going to continue to perform to that degree this year, here is a closer look at some factors that might hold the company back in 2020.
Key Analysis
One thing that needs to be kept in mind with regards to Trulieve Cannabis is that the company’s operations are primarily concentrated in the Florida market. The majority of its cultivation farms, as well as dispensaries, are located in Florida. It faces stiff competition from MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) and the well-capitalized Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF) in this market.
Moreover, if Florida legalizes recreational marijuana, then it could prove to be a blow for Trulieve since the company is solely focused on medical marijuana. So, like all other cannabis stocks, Trulieve also comes with certain risks that investors should keep in mind.
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TRUL stock is up 0.35% at C$14.16.
However, there are plenty of other factors that make it clear that Trulieve Cannabis could well be the multi-state operator stock to watch in 2020. As mentioned, it now has a strong presence in Florida and has built its brand by serving plenty of medical marijuana patients in the state. Moreover, Florida is expected to be one of the biggest medical marijuana markets in the United States in the coming year. The company’s considerable interests in the state are only going to help it in growing further.
Trulieve recorded $70.7 million in sales in the third quarter, and the projected sales for the entire year now stand at $280 million when extrapolated. That is a substantial figure, and the fact that the company has ample cash in hand makes it possible for Trulieve to go on any expansion exercises when it sees fit.
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Featured image: DepositPhotos © nazarenko
