Trulieve Cannabis Execs Buy 26K Company Shares: What Does This Mean For Investors?

Trulieve Cannabis Corp. TCNNFTRUL executives recently purchased 26,000 shares, signaling potential confidence in the company's future. Between November 8 and 13, COO Marie Zhang, CPO Kyle Landrum, and CLO Eric Powers increased their holdings, according to a report by Beacon Securities.

Zhang made the largest move, acquiring 21,300 shares at an average price of $7.19, adding $153,147 of an estimated total of around $186.000. What does this mean for investors? Is the stock undervalued?

Stock Decline

Trulieve's stock has dropped sharply in recent weeks, trading at around $6.34 after peaking at $14 in mid-October. The decline follows two major setbacks: the failure of Florida's cannabis legalization ballot and heightened political uncertainty tied to Donald Trump's election victory.

These setbacks created an election gapt hat the stock has yet to close.

There’s a reason why those events had a significant impact on the company. Florida is the company's largest market, and the ballot's failure denied an opportunity to double the size of the state's legal cannabis market. A Trump presidency also raises concerns about the future of federal cannabis reform, further complicating Trulieve's growth outlook.

The ballot's defeat was particularly damaging. If approved, it would have allowed Trulieve to expand its 156 Florida stores into the recreational market, dramatically boosting revenue potential.

Adding to these challenges, Trulieve's third-quarter 2024 earnings showed mixed results. The company reported $284 million in revenue, a modest 3% increase from the previous year, with a strong gross margin of 61% and adjusted EBITDA of $96 million (up 24% year-over-year). However, a $60 million net loss, significantly higher than the $25.4 million loss in Q3 2023 highlighted the financial strain of $48 million in non-recurring expenses tied to the Florida ballot campaign.

Read Also: Can Trump’s Return Save The Cannabis Sector? Debt Mounts As Giants Face Post-Election Reckoning

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Is Trulieve Undervalued?

Insider stock purchases often indicate that management views the stock as undervalued. These moves could also be intended to restore investor confidence after a significant drop. However, determining undervaluation is complex and subjective, often requiring a mix of financial analyses and market sentiment.

From a technical perspective, Trulieve appears oversold, with an RSI of 31.94, suggesting the possibility of a rebound. Key resistance levels are $9.58 (SMA) and $14 (the October high), while support hovers at $6.00, with a critical floor near $3.71 (lower Bollinger Band). Recent high volumes during the selloff suggest heavy selling pressure, but the current lower volumes indicate stabilization.

Chart created using Benzinga Pro

At a glance, it seems the market has not bought yet on the promising future this cannabis company has to offer, with or without legal recreational cannabis in Florida. But, with small-cap cannabis stocks prone to volatility, this is a situation investors should monitor closely.

• Read Next: Trulieve’s Q3 Revenue Up Slightly Year-Over-Year, Net Loss Grows Amid $48M In Cannabis Legalization Support

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