Marijuana stocks have been on a tear since they started trading on [Cannabis Stock Exchange](https://cse.lizziescbd.com/), which is a platform designed to help cannabis companies simplify their growth and access capital. It was created to help companies like [Cannabis Science, Inc. ](https://cse.lizziescbd.com/cse/profile/CSCI.html), [Marijuana, Inc. ](https://cse.lizziescbd.com/cse/profile/MJNA.html), and [EC3 Holdings, Inc. ](https://cse.lizziescbd.com/cse/profile/EC
It’s been a while since I wanted to write a post on this blog, but I decided to keep going with my research on the cannabis industry. As we know, the cannabis industry is producing a lot of capital gain, and is expected to keep growing until 2020 .
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George Leong, BA. Published on 23. June 2021
Enormous possibilities for this medium-sized soup pot
Marijuana stocks fell sharply after traders on Reddit sparked an impressive rally in the sector in February.
While the jump on the marijuana market was incredibly interesting to watch, there was no reason to buy other than the hype on Reddit. In the long run, I am satisfied with the evolution of the marijuana segment in the U.S., where more and more states are joining the legalization trend, which is expected to continue.
Trulieve Cannabis Corp (CNSX:TRUL, OTCMKTS:TCNNF), a vertically integrated marijuana company, is a US mid-cap player capable of generating significant capital gains.
At $36.00, TCNNF shares are well below the high of $53.73 reached on September 18. The month of March has been reached. Right now, I see Trulieve stock as an aggressive risk-reward opportunity for venture capital investors.
Think long term with TCNF shares
The stock chart below shows the recent decline in shares of Trulieve Cannabis Corp. Prior to the sell-off after the March 2021 high, Trulieve had an impressive run from below $6.00 in March 2020.
TCNNF managed to hold on to the support trend line during several tests, but failed to hold after breaking the support trend line in April.
For now, the technical picture is neutral in the short term as Trulieve shares float in a narrow sideways channel in search of support.
If TCNNF stock fails to hold, it could be heading for the 200-day moving average at $35.02 or the $20.00-29.99 range, where I see a great opportunity.
Graph courtesy of StockCharts.com
Sales and profitability growth
If you look at Trulieve Cannabis Corp’s three-year revenue picture, you’ll see that the company is showing tremendous growth so far, with revenue up 407% from 2018 to 2020.
During this period, when Trulieve was experiencing aggressive expansion, its compound annual revenue growth rate (CAGR) reached an astounding 122%.
| Fiscal year | Revenues (millions) | Growth |
| 2018 | $102.8 | N/A |
| 2019 | $252.8 | 145.9% |
| 2020 | $521.5 | 106.3% |
(Source: Trulieve Cannabis Corp. (TCNNF), Yahoo! Finance, last visited June 21, 2021).
But as expected, analysts think Trulieve’s revenue growth will moderate to more realistic levels.
Still, the expected growth looks impressive. Trulieve Cannabis Corp is expected to grow revenues by 68.7% to $879.9 million this year and by 42.7% to $1.3 billion in 2022. (Source: Ibid).
In the meantime, Trulieve generated earnings before interest, taxes, depreciation and amortization (EBITDA).
| Fiscal year | EBITDA (millions) | Growth |
| 2018 | $78.4 | N/A |
| 2019 | $302.5 | 285.8% |
| 2020 | $207.9 | -31.3% |
(Source: Ibid).
Trulieve Cannabis Corp has also generated earnings per share (EPS) under generally accepted accounting principles (GAAP) for the past three years.
| Fiscal year | GAAP diluted earnings per share | Growth |
| 2018 | $0.42 | N/A |
| 2019 | $1.54 | 266.7% |
| 2020 | $0.53 | -65.6% |
(Source: Ibid).
Although Trulieve announced lower earnings per share for 2020, the company’s outlook is positive: Growth of $1.16 per diluted share is expected this year, and $1.66 in 2022. (Source: Ibid).
Analyst
Strong tailwinds in the US marijuana segment have done Trulieve Cannabis Corp good, as evidenced by the company’s revenue and profit growth.
Trulicious stocks are poised for impressive growth. Given the recent drop in prices, this could be a good opportunity to get in.It seems like the only way for a stock to go higher is for the company to grow revenue and earnings and that’s what we’re going to do in this article. The company I’m going to discuss today has been a favorite in the cannabis industry since it was first founded and was originally going to be called “Veritas Pharma” but the executives changed the name to “Cannabis Science”.. Read more about factors affecting stock prices pdf and let us know what you think.
Frequently Asked Questions
What drives a stock price higher?
A stock price is driven higher by the expectations of investors that the company will be able to increase its earnings.
Which factors can affect a stock’s price?
-The company’s financial performance -The company’s industry -The company’s sector -The company’s management -The company’s debt/equity ratio -The company’s cash flow -The company’s dividend -The company’s earnings per share -The company’s price-to-earnings ratio -The company’s price-to-sales ratio -The company’s price-to-book ratio -The company’s price-to-free-cash-
How do you know when a stock price will increase?
A stock price will increase when the company has a higher profit margin.
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