Trulieve Analyst Highlights 50% Volume Jump Sparked By Pandemic Shopping

Trulieve Cannabis Corp TCNNF shares have fallen 29.25% since the beginning of the year.

The Trulieve Analyst

Cantor Fitzgerald’s Pablo Zuanic reiterated an Overweight on Trulieve with a $30 price target.

The Trulieve Investment Thesis

COVID-19 has impacted industry sales volumes in Florida, which have grown 40% week over week, with Trulieve experiencing a 50% increase in flower volumes, Zuanic said in a Wednesday note. (See his track record here.)

Before Tuesday’s revival, U.S. marijuana stocks were down 45% in the last month, while SPX was  down 25%, the analyst said. 

“We think that created a great investment opportunity with the well-capitalized and well-structured MSOs, given the sector’s resilience (i.e. business up during this COVID-19 crisis).”

U.S MSOs are even in a better position than the companies that manufacture canned soup and ready-to-eat cereals during this crisis, he said. 

While cannabis dispensaries in Florida remain open, last week’s sales may indicate consumers are worried about potential closures, or just the higher need for cannabis consumption during home isolation in response to the COVID-19 outbreak, or both, Zuanic said. 

“Trulieve outperformed," the analyst said. "Trulieve saw 50% volume growth in flower volumes week on week in the latest week (3/19), and all volumes for all its other THC products were up 36% [week-over-week].”

Although these are just one week of developments, Zuanic said he believes they speak volumes about the company’s brand power, capacity and potent supply chain, leading Cantor to stick with its estimates and price target. 

Curaleaf Holdings CURLF also pointed out in its Tuesday conference call that it saw a notable rise in demand during the period of home isolation. 

The Trulieve Price Action

Trulieve shares were trading 4.87% higher at $8.55 at the time of publication Wednesday. 

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Trulieve CEO Kim Rivers speaks at the Benzinga Cannabis Capital Conference in February. Benzinga file photo by Shelby Jones.