As The Dales Report comments in severely edited and abridged (by 62%) excerpts from its latest newsletter, “The U.S. cannabis sector is bracing for a big week as four major multi-state operators – Green Thumb Industries, Trulieve, Curaleaf, and TerrAscend – are set to report earnings…[and these] earnings could set the tone for the U.S. cannabis sector’s next chapter. Each of the 4 companies faces the same macro challenges – federal uncertainty, pricing pressure, and investor wariness – but each is forging its own path through the weeds…[and]. as the saying (almost) goes, when the going gets tough, the tough get growing…
Green Thumb Industries: Steady Growth Amid the Grind
Green Thumb has earned a reputation as one of the most consistent and profitable U.S. cannabis operators…[and] analysts will be watching [to see] if Q1 2025 can…[maintain or build upon] that momentum [when it] reports this Wednesday (May 7th) after market.
…Green Thumb ended last year with 101 retail locations and…[it is already at 104 so far this year]… with plans to invest in store buildouts and renovations…[and its] relatively healthy balance sheet…should allow it to execute growth plans without the need for dilutive financing.
Investor sentiment toward GTI is comparatively optimistic within the sector…and analysts have price targets roughly double…[GTI’s current stock price], betting that Green Thumb’s “slow and steady” execution will win the race. If Q1 numbers show continued revenue uptick and stable margins, it will reinforce that narrative and any commentary on consumer demand or new state launches will also be parsed for hints of “green shoots” in an otherwise challenging climate.
Just in! See Q1 results here: Q1 2025 results: GTI missed expectations.
Trulieve: Sunshine State Giant Faces Growing Pains
Trulieve is the dominant player in Florida’s medical cannabis market, and Florida’s importance cannot be overstated – it’s Trulieve’s crown jewel and profit engine and the company presents its Q1 report before the market opens this Wednesday (May 7th). Analysts will be parsing any commentary on Florida’s outlook – updates on the status of a ballot initiative to legalize adult use in the Sunshine State…or Trulieve’s preparations for a post-legalization boom (e.g. store expansion, production capacity…[while] investors will be eager to see if profitability is within reach or if further write-downs and integration costs (from its 2021 Harvest acquisition, for example) will continue to weigh…
…Investor sentiment around Trulieve has been mixed…however, analysts remain upbeat on the long term with some price targets implying a multi-bagger upside from current levels. In the short term, Trulieve needs to reassure investors that growth hasn’t stalled. Look for any updates on cost-cutting…and on debt management…
The company added 33 new dispensaries last year, bringing its total to 225 stores across 11 states.
Just in! See Q1 results here: Q1 2025 results showed stable topline revenue and improving profitability:
Curaleaf: Scaling Back to Leap Forward?
Curaleaf is the largest U.S. cannabis company by revenue and footprint, but “largest” hasn’t meant “fastest-growing” of late. In 2024, Curaleaf’s revenue…[showed] virtually 0% growth YoY, reflecting a year of portfolio pruning and strategic refocus…[and] this strategy saw Curaleaf’s Q4 2024 adjusted gross margin improve by 160 basis points year-over-year, thanks to cost cuts and SKU rationalization. Adjusted EBITDA in Q4 came in roughly flat vs. the prior year despite lower sales – a sign that efficiency gains are offsetting revenue pressures – and the company ended Q4 with $107 million in cash on hand, giving it a bit of liquidity cushion.
The company reports its Q1 report on Thursday (May 8) after market close and Curaleaf management has signaled a mid-single-digit sequential revenue decline…Investors will be keen to see if new growth engines can fire up later in 2025…[and], international growth is part of management’s narrative to investors albeit still a small slice of the pie…Some analysts see significant upside…implying the market is undervaluing Curaleaf’s scale and improved operations. For that optimism to be realized, [however,] Curaleaf needs to show that flatlining revenue will turn to growth again…
The company has trimmed the fat; now it must prove it can reignite growth organically, as it has guided a capex-light strategy for 2025 focusing on existing assets…[If the company] can convey a credible path forward that balances discipline with expansion investors may start to believe Curaleaf can scale new heights again. In short, Curaleaf is in “prove it” mode: it has done the cost-cutting; now the street wants to see revenue catalysts on the horizon.
TerrAscend: Small Player, Big Focus on Profit
TerrAscend may be the smallest of the four, but it’s arguably the most financially disciplined. The company has been laser-focused on generating cash and optimizing its footprint… Perhaps most impressive: TerrAscend has now logged 10 consecutive quarters of positive operating cash flow, and 6 straight of positive free cash flow – a metric few cannabis operators can claim and analysts and investors will be looking for TerrAscend to maintain this prudent trajectory in its Q1 2025 report which is being released on Thursday (May 8th) after market close. Don’t expect blockbuster revenue growth – TerrAscend’s strategy is more about profitable growth in just five states (Pennsylvania, New Jersey, Maryland, Michigan, and California) and is entering a sixth (Ohio) via a recent acquisition of a profitable dispensary.
The stock has since been weighed down by the sector’s gloom…however, if any company is positioned to impress fundamentally, it might be TerrAscend due to its sustainable approach. Investors will likely reward even modest growth if it comes with stable or improving profitability. A witty way to frame TerrAscend: it’s the little engine that could – not the biggest, but grinding out cash flow quarter after quarter, proving that slow and steady (with an eye on the bottom line) wins at least some kudos in the cannabis race…”
