Q1 2025 Trulieve Cannabis Corp Earnings Call
Speaker Change: I knew he was a killer, first time that I saw him Wondered how many girls he had left and left haunted But if he's a ghost, then I can be a phantom Holding him for ransom Some, some, some boys are trying too hard He don't try at all though No more than my exes, but he acts like such a man though I see nothing better, I keep him forever
Speaker Change: Vendetta, I, I, I see how this is gonna go Touch me and you'll never be alone Ice island breeze and lights down low No one has to know In the middle of the night, in my dreams You should see the things we do, baby In the middle of the night, in my dreams
Speaker Change: Are you ready for it?
Debbie: Good morning everyone and welcome to the Trulieve Cannabis Corporation First Quarter 2025 Financial Results Conference Call. My name is Debbie and I will be your conference operator today. As a reminder, this conference call is being recorded.
Speaker Change: I would now like to introduce your host for today's conference, Christine Hershey, Vice President of Investor Relations for Trulieve. You may begin.
Thank you. Good morning and thank you for joining us.
Speaker Change: During today's call, Tim Rivers, Chief Executive Officer, and Ryan Blust, Interim Chief Financial Officer, will deliver prepared remarks on the financial performance and outlook for Trulieve. Following the prepared remarks, we will open the call to questions.
Speaker Change: An archived version of today's conference call will be available on our website later today.
Speaker Change: As a reminder, statements made during this call that are not historical facts [inaudible]
constitute four looking statements.
Speaker Change: including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including item 1a, risk factors of the company's most reads and annual report on form 10k, as well as our periodic quarterly filings.
Speaker Change: Although the company may voluntarily do so from time to time, it undertakes no commitment to update or revise these for the end datements whether as a result of new information, future events, or otherwise, except as required by law.
Speaker Change: During the call, management will also discuss certain financial measures that are not calculated in accordance with the United States generally accepted accounting principles or gap. We generally refer to these as non-GAAP financial measures.
Speaker Change: These measures should not be considered in isolation or as a substitute for Trulie's financial results prepared in accordance with Gap.
Speaker Change: A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is available in our earnings press release that is an exhibit to our current report on Form 8K that we furnished to the SEC today and can be found in the Investor Relations section of our website.
Speaker Change: Lastly, at times during our prepared remarks or responses to your questions, we may offer metrics to provide greater insight into the dynamics of our business or our financial results.
Speaker Change: Please be advised that we may or may not continue to provide these additional details in the future. I'll now turn the call over to our CEO , Kim Rivers.
Kim Rivers: Thank you, Christine, and good morning, everyone, and thank you for joining us today. We are excited to report another strong quarter and fantastic start to the year. Best in class, Grace Mergen, and strong operating cash flow during a seasonally slower quarter clearly demonstrate our commitment to operational excellence.
Kim Rivers: First Quarter Revenue of $298 million increased slightly compared to an a-tippably strong first quarter last year.
Kim Rivers: Growth margin improves is 62% versus 58% last year, driven by lower production costs and discipline promotional activity. Adjusted EBITDA of $109 million or 37% margin improved by 1% compared to last year.
Kim Rivers: Operating cash flow at 51 million, contributed to cash of approximately $330 million at quarter end
Kim Rivers: First quarter result shows strong demand for cannabis products Retail traffic and unit sold both increased 7% year-over-year, while pricing compression and loyalty point redemptions pressured retail revenue to decline slightly by 1%
Kim Rivers: Lamentum in our wholesale business continued in the first quarter, with revenue up 25% versus last year. Demand for Trulieve branded products and expanded relationships with key wholesale partners in Maryland and Pennsylvania contributed to higher wholesale revenue.
Kim Rivers: Since the start of the year, we observed modest shifts in consumer behavior towards value-oriented products.
Kim Rivers: As in prior cycles, we are actively refining our product offerings, pricing and promotional activity to meet customers where they are.
Kim Rivers: By leading into competitive advantages, including deep connectivity to our customer base and the ability to quickly modify production mix and utilization, we are further solidifying our position as an industry leader. This year, we are building upon the strength of our business with an emphasis of four key areas. Thank you very much.
Customers, Distribution, Branded Products, and Reform to Drive Regulatory Change.
Kim Rivers: First and foremost, everything at Trulieve begins and ends with a customer in mind. Our store teams take great pride in serving our customers with care, knowledge, and convenience.
Kim Rivers: A key component of our customer-centric approach is our ability to provide store managers and associates with training, support, and real-time feedback to drive overall customer satisfaction and outstanding experiences.
Kim Rivers: During the first quarter, net promoter score increased by 4%, 4 points compared to last year, and every market scored within our target range. Kudos to the entire retail team for driving such a notable improvement.
Kim Rivers: As part of our strategy to attract and retain loyal customers, last year, Trulieve rolled out a refreshed rewards program company-wide featuring portable, stackable, and redeemable points.
Kim Rivers: All designed to reward repeat purchase in foster customer retention. At quarter end, the loyalty program reached over 625,000 members growing by almost 20% in the first quarter
Kim Rivers: Consistent with last quarter, on average, loyalty program members spent 2.3 times more per month than non-loyalty members on average.
Kim Rivers: Our data shows that consistently delivering elevated experiences, high quality branded products and generous loyalty rewards to customers, reinforces retention. First quarter customer retention remains strong at 66% company-wide and 75% in medical
Kim Rivers: Turning now into our second focus area, Distribution, explaining our retail and wholesale distribution channels allows us to reach more customers while providing greater access to legal cannabis products.
Kim Rivers: We are working to attract new customers in retail with new, relocated and refreshed shores while it's celebrating wholesale distribution of branded products particularly in Maryland and Pennsylvania [inaudible]
Kim Rivers: This year, we plan to open 10 new retail locations, relocate up to three stores, and refresh every model of the 45 dispensaries.
Kim Rivers: During the first quarter, we opened 60 dispensaries in Arizona, Florida, and Ohio. We relocated one Pennsylvania dispensary, refreshed nine locations, and closed two Florida locations. Today, we operate 229 dispensaries in eight states.
Kim Rivers: The power of our retail platform was on full display during the 420 holiday season compared to last year units sold increased by 20% and traffic increased by 9%
Kim Rivers: Customers took advantage of 420 deals stocking up during sales while celebrating the holiday. Our retail team expertly managed the spike in customer traffic, equipped with training, technology and support. On average, customer wait times were less than 4 minutes, demonstrating our ability to provide superior service levels at higher volumes.
Kim Rivers: The size and sophistication of our combined retail production and data platform, Lens Relieve a meaningful competitive edge in several ways, especially in dynamic macroeconomic environments.
Kim Rivers: First, as a leading cannabis retailer in the US, Trulieve has unparalleled access to customers.
Kim Rivers: Second, multi-year investments in data analytics enable early identification of changing customer behavior. Third, modular production capacity allows quick pivot in utilization and product mix in response to market conditions. [inaudible]
Kim Rivers: In combination, these capabilities support Trulieve the flexibility to identify and respond to evolving customer preferences for the reinforcing customer satisfaction and retention.
Kim Rivers: Knowing what our customers want, big-capes efforts in our third-biquest area, branded products.
Kim Rivers: Consistent availability of approachable high-quality products is essential to long-term success.
Kim Rivers: With a 4 million square feet of capacity, our production team continues to deliver outstanding results. Yields and potencies remain strong overall in the first quarter, contributing to growth margins while supporting the value proposition of branded products.
Kim Rivers: Trulieve's brand portfolio includes meticulously crafted internal brands, augmented by popular third party brands.
Kim Rivers: In the first quarter, Trulieve sold over 12 million branded products through our Branded Resail Network, up 7% versus last year.
Kim Rivers: Truly Brands Modern Flower, and Rollbun, continue to gain momentum, representing over 40% of our
Kim Rivers: The expanded reach of these accessible brands demonstrates true residents with customers across the country. Our edible brand sweet talk continues to gain traction in Arizona, Florida, and Maryland. We've planned to launch additional products under the sweet talk brand and existing markets this year.
Kim Rivers: Turning now to the new Brandon Products Category for Trulieve, CHC Beverages
In February , we launched Onward, a line of Farm Bill compliance beverages.
Kim Rivers: Premium onward beverages powered by Trulieve are available in select locations, an ADC fine wine and spirits, short flickers, and total wine in Florida, and online at drinkonward.com.
Kim Rivers: Through a combination of in-shore sampling events and training sessions, we are raising awareness and understanding of the THC beverage category any onward brand.
Kim Rivers: Next month, we plan to launch an exciting new energy drink called Upward [inaudible]
Kim Rivers: Upboard leverages are proprietary CBD and Chief CM Mulchandblend to provide an enjoyable stochastication like no other.
Kim Rivers: Combining CBD and THC with natural caffeine creates an elevated feeling that is simultaneously calming and energizing. The upside is for consumers seeking clarity and focus without legitimizers or crash associated with traditional caffeine-based energy drinks.
Kim Rivers: Upwork will be available in four flavors, 5 milligram lemonade, peach nectarine, and strawberry tea, and 10 milligram pink lemonade . .
Kim Rivers: Broad Distribution of High Quality Branded Products is essential to building lasting brand equity supported by an army of oil customers. We look forward to expanding branded product offerings and distribution through new and established channels.
Finally, our 4K area is reformed [inaudible]
Kim Rivers: Trulieve continues to lead from the front, tirelessly pushing for a common sense approach that acknowledges the value of cannabis and reflects popular opinion.
Kim Rivers: This year we are investing to support meaningful advancement, including reef scheduling, safe thinking, and state 2.0 at the federal level and adult use in Florida and Pennsylvania.
Kim Rivers: Our action includes individual efforts by Trulieve and a leadership role in the US cannabis roundtable. For decades, federal classification of cannabis as the Schedule 1 drug has lost medical research, prevented full development of the regulated industry, and limited access to natural relief provided by the plant.
Kim Rivers: Ray Scheduling to Schedule 3 would acknowledge the medicinal value of cannabis and enable cannabis research.
representing a meaningful step towards greater reform. [inaudible]
Kim Rivers: At the same time, race scheduling would remove the 288 tax burden, allowing state-licensed operators to pay normalized tax rates [inaudible]
Brainup Capital to Invest in the Regulated Industry
Kim Rivers: Safe banking would allow financial institutions to provide ordinary banking services to cannabis companies and employees, reducing reliance on cash and improving safety for dispensary workers.
Kim Rivers: Safe Banking enjoys strong bipartisan support as it would accelerate economic growth in the development of a more robust legal industry Since 2019, safe banking legislation passed in the House seven times and moved out of the Senate banking committee We are optimistic that safe banking legislation will be revisited this year We are optimistic that safe banking legislation will be revisited this year
Kim Rivers: Last month, bipartisan legislators introduced a new bill called the State 2.0 Act. It passed, this bill would allow each state to determine its own approach to regulating cannabis . . .
Kim Rivers: Stage 2.0 removes cannabis from the control substances act, allows oversight by the TTB and SDA, and removes the 2A2E tax burden for compliant operators.
Kim Rivers: In our home state of Florida, last November , voters fell just shy of the 50% threshold required for passage However, approximately 6 million Floridians voted in favor of personal abilities
Kim Rivers: In December , the Spartan State Florida campaign filed revised about language for personal adult youth legislation and court legalization, incorporating learning from the 2024 campaign.
Kim Rivers: The campaign is currently working on signature gathering required for inclusion in the November 2026 election cycle. To date, the campaign has collected over 700,000 signatures, which once validated, it's sufficient to trigger a review by the Florida Supreme Court.
Kim Rivers: with 23 million residents and 143 million tourists visits per year. Florida has the potential to be the best legal canvas market.
Kim Rivers: In Pennsylvania, support for adult youth legalization continues to build momentum, as most neighboring states have launched adult youth programs.
Kim Rivers: Earlier this week, adult youth legislation was filed in the House of Representatives, kicking off the first step towards reaching a bipartisan agreement.
Kim Rivers: Trulieve has been working to educate legislators and key stakeholders about the benefits of cannabis and legalization for adults. We remain optimistic that adult legalization can happen in the near term.
Kim Rivers: With increasing acceptance of cannabis, Trulieve will continue to push for meaningful cannabis reform and expanded access for patients and adults.
Kim Rivers: In summary, we're advancing our leading edge in four areas this year, customer distribution, brain and product and reform.
Kim Rivers: By leading into our intrinsic strengths, Trulieve continues to separate from the pack, propelled by a differentiated strategy and meaningful competitive advantages. With that, I'd like to turn the call over to our interim CFO , Ryan Blust, please go ahead. Thanks. Thank you, Tim. Good morning, everyone.
Ryan Blust: First quarter revenue was $298 million, up slightly year after year, driven by new store openings, adult use sales in Ohio, and growth in the wholesale channel.
Ryan Blust: First quarter growth profit was 183 million, or 62 percent margin, up 9 million from last year. Growth margin will continue to fluctuate quarter to quarter, depending on product and market mix, inventory sell through, promotional activity, and idle capacity cost.
Ryan Blust: SNA expenses in the first quarter were $119 million or 40% of revenue compared to $101 million or 34% last year. Higher SNA included new store opening expenses, technology and infrastructure investments and cattle is campaigning support.
Ryan Blust: First quarter net loss was 33 million compared to a loss of 23 million last year. First quarter loss per share was 17 cents, which was comparable to last year. Excluding non-recurring charges, first quarter loss per share would have been 2 cents compared to a loss of 5 cents last year.
Ryan Blust: First quarter adjusted EBITF with $109 million or 37% representing a margin agreement of 1% compared to last year. First quarter adjusted EBITF margin reflects industry leading growth margin and expense control in our core business.
Ryan Blust: Moving on to our balance sheet, we ended the cool girl with approximately 330 million cash and 480 million in debt. Given the strength of our cash generation, we remain well positioned to address our near-term financial obligations.
Ryan Blust: As we indicated in our last call, we are prepared to retire our senior secured notes due in 2026 later this year with a target to refinance up to half of the 360 million ounce of candy.
Ryan Blust: Shifting the cash flow. First quarter cash flow from operations, sold with 51 million. Capital expenditures were 17 million with free cash flow of 34 million. Absent the catalyst campaign contribution, cash flow from operations would have been 74 million, and free cash flow would have been 57 million.
Ryan Blust: Turning now to our outlook, we anticipate second quarter revenue will be flat to upload single digits sequentially. We anticipate gross margin will fluctuate quarter to quarter and expect full-year gross margin will be comparable to 2024.
Ryan Blust: We expect full-year cash flow from operations of at least 250 million in capital expenditures about supporting
Ryan Blust: We may refresh our forecast later this year, dependent on macroeconomic conditions and the time and progress for Cowell's.
Ryan Blust: I look forward to working with the team as we execute on our plans. With that, I'll turn the fallback over to Kim. Thanks, Ryan.
Speaker Change: Cannabis is an integral part of daily life for millions of Americans and millions of Americans.
Speaker Change: legal cannabis provides safe products for patients and adults seeking relief and recreation. This is a growing American industry that employs almost half a million workers directly, while generating tax revenue and contributing to economic growth through support services.
Speaker Change: U.S. Cannabis Sales of Reduction to Reach $36 billion this year.
Speaker Change: Today, the U.S. has 39 states with medical and ordeal youth programs, all operating in direct conflicts with federal law in popular opinions. Most Americans support reform, including rescheduling, state-finking, and expanded access, especially for medicinal youth.
A March Poll Conducted by Fabrizio Leon Associates
Speaker Change: who is 72% of registered voters support rescheduling with 80% of voters aged 18 to 34 in favor.
The growing divide between federal and state law is unsustainable [inaudible]
Speaker Change: We remain an optimistic about the future of the industry and of the current administration.
Speaker Change: In Florida and Pennsylvania, a majority of constituents support adult youth legalization. We believe it is a matter of when and not if these states will launch adult youth programs.
Speaker Change: Trulieve will do its part, continuing to push for common sense reform, working directly with the elected officials, regulators, and key decision makers alongside industry peers.
Speaker Change: Bolstered by industry-leading margins and strong cash generation, Trulieve had flexibility to make strategic investments while reducing beverage balance sheet leverage .
Speaker Change: With our loyal customer base, branded products, and reform efforts, Julie stands out as an industry leader. I am so proud to leave this team together. We are ready to define the future of Cannabis. Thank you for joining us, and as I always say, onward.
Speaker Change: At this time, Kim Rivers and Ryan Bluffs will be available to answer any questions. Operator, please open up the call for questions.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster. And also, as a reminder, please limit yourselves to one question and one follow-up.
Speaker Change: The first question comes from Luke Hannan with Canacord Genuity. Please go ahead.
Thanks. Good morning, everybody, and congratulations on the results.
Speaker Change: Kim, I wanted to dig in. I mean, you touched on in your prepared remarks that it is an industry leading margin and very robust cash flow that you're able to deliver during the quarter. But Q1 is typically seasonally a slower quarter. Despite that, you delivered a 62% gross margin. I know that that sort of ebbs and flows throughout the year and you're still anchored around that 60%, but can you just shed some light on what specifically drove that sort of performance versus the 60% during this quarter, if there happened to be one or two.
or two items that were really behind that. Thanks. Thank you very much.
of the... of the...
Flower and products that were able to produce [inaudible]
Speaker Change: and product mix also has a bit to do with it in terms of what folks are gravitating towards in the quarter. The company remains very disciplined in our strategic positioning of our products. And again, that's two days to the entire team in our shared services department who focuses on really deep understanding of the customers. And it's one thing to understand the customer. It's another thing to be able to actually take those learnings and monetize and react right and quickly.
Speaker Change: to changing patterns and trends. I think that we as an organization are continuing to build upon those expertise which are pulling through in the numbers. That being said, I would just say, again, as we look through and we look down the pike at the rest of the year, that it will absolutely we fully expect it to ebb and flow just with certain dynamics that may be happening in a quarter. And again, that product
Speaker Change: and the consumer preferences. We have an obligation right, we're always going to meet the customer where they're at. And so, you know, we'll see where that is up for the rest of the year, but really, I think it's controlling the controllables and really a laser focus on continuing to deliver efficiently, but also, of course, like I said, meeting that customer where they're at. [inaudible]
Speaker Change: That's great, thanks. And for my follow-up, I did want to ask about your beverage line as well, so you've touched on some of the success that you've witnessed to date. When it comes to the sort of consumer that you're attracting or that product line is attracting rather, is that more of the typical cannabis connoisseur is a gaining traction with those who maybe haven't been quite as familiar with THC products or cannabis in the past.
Speaker Change: and then I realize this is sort of a few questions in one here, but I'm curious to know how the consumer education
and perhaps government education efforts of...
Speaker Change: So that we can continue to directly interface with the consumer and directly gather that data and intel because, again, that's something that we built strongly about at Trulieve and early indications are that it's a mixed bag of the relates to consumers which we find very exciting. So as we look to call it the stronger product, call it 10 milligram products, right, it certainly appears that some of those consumers are familiar with cannabis, have definitely understand right.
Speaker Change: with a cannabis product. So we believe education is key to the sustainability of this category and are working not only, of course, directly with consumers, but also have a whole education platform behind the scenes with our distribution partners to make sure that the sales teams and associates, because we are finding that there's knowledge gaps, for sure, as it relates to sales for training in these stores because they're just not familiar with the category. So we see that as a very large opportunity for us to come in and really be...
Speaker Change: the leading expert and in source of information for the sales force and on the ground and also course through our distribution partners as well.
That's great. Thank you very much.
Yep.
Speaker Change: The next question is from Aaron Grey with the Alliance Global Partners. Please go ahead.
Aaron Gray: Hi, good morning. Thank you very much for the questions and congrats on the quarter.
So...
Aaron Gray: The first question for me, just want to talk a bit about the rewards program, seems to be getting some nice momentum to them.
Speaker Change: You can speak to how it's helped you to refine your promotional strategy, build a remote around your core consumer, and if you're looking to make any adjustments to it, I know it's been a couple quarters now that you've implemented it, so curious. Any feedback you have now the program has been active for some time, kind of for about 7% of sales, so any kind of targets or potential changes you might want to implement now that's been in there for a while. Thank you.
Speaker Change: Yeah, thanks, Aaron. I mean, the loyalty program has just really been a home run for us. And so, you know, we're continuing to focus on finance and adoption, and because again, you know, it's still fairly, fairly new for us and the feedback has been exceptionally positive. We're continuing to do some testing within the platform in terms of what types of additional offerings resonate with consumers, whether it's...
Speaker Change: and some increased points on specific brands, whether it's offering loyalty rewards numbers.
Speaker Change: specific loyalty only savings on certain days or certain products. So we're doing a lot of continued exploration and testing on what really resonates with that customer base. But I mean, look, we've got, you know, as we mentioned over 750,000 folks signed up and, you know, when you've got over, you know, 68% of purchases in Q1 from folks that are subscribed and there obviously is definitely
Speaker Change: and it's a very exciting, exciting tool for us to continue to lean into.
Speaker Change: Okay, great, appreciate the color there. A second question for me, just on floor to end our promotional environment.
Speaker Change: Can you comment on the promotional environment that you're seeing there? We're now six months removed from the adult measure, not passing at the November election.
Speaker Change: You know, are you seeing the notable changes in the competitive environment in the state? Do you feel like now you've kind of worked through any potential inventory that might have built up ahead of anticipation? And it's more rational now with the more focus needed on profitability and cash flow. So, you know, any commentary what you're seeing in the environment will be helpful. Thanks. Thanks.
Speaker Change: Yeah, I mean, I think that, you know, across across the country, and then I'll get support specifically, but I think across the country, as I mentioned in the prepared remarks, right? We are starting to see some continued macro economic pressure on the consumer. We are seeing and it's a mixed bag, and depending on the specifics of the market, but I think just generally, right? And we saw this, you know, this is evidence loads throughout the artistry as a company, so this is a pattern that we're unfamiliar with. But right, we're
Speaker Change: for customers are looking to stretch their dollar a little bit more, looking to tree down, and so, again, having not right product mix is really key in every market, and in order specifically, again, as you know, we've got a variety of competitors in Florida, and not every competitor is approaching 2025 in the same way. We certainly are seeing some competitors who are definitely...
You know...
Speaker Change: Speaking directly to our customers, we're also ensuring that we have product offerings and availability to, again, we customers where they are. So, bright in an environment where you may have some tree down occurring, you of course want to make sure that your value portfolio is robust and can speak to that customer. While maintaining our high levels of service and
Speaker Change: and again, you know, the loyalty program helps with that as it relates to retention, make sure we retain the customers that we have. So, you know, certainly there is, you know, wallet pressure in the market, but again, I think that's more than just a Florida conversation. I think that that's a national conversation, but I think that, you know, we're very aware of it and very equipped in how we're strategically addressing it. And it was present in the first quarter as well, and I think that I think we
and held our end.
Speaker Change: Appreciate that, that's helpful caller. I'll go ahead and jump back in the queue.
Thanks.
The next question is from Russell Stanley with Beacon Securities
Speaker Change: Please go ahead. Good morning, and thank you for taking my question. I just wanted to follow up on a prior question around
Speaker Change: Onward, I know it again, it's early days, but can you talk about where you're seeing the strongest traction in terms of distribution channel, directed consumer versus retail shelves, and on the directed consumer front, just wondering which states you're seeing the most interest out of. Thank you.
Speaker Change: I think we believe strongly that this is ultimately going to be a distribution play. We have augmented some of our strategy as it relates to direct to consumer and I have to do more with our pricing tiers and shipping costs and whatnot and our ability to negotiate and that's doing more reasonable.
Speaker Change: position. So I think it's maybe a little early for us to just tap in for us, so there was a pretty large end.
Speaker Change: Spread, if you will, on cost between DTC and distribution previously. And so I would say, check back with me on that maybe next quarter, and I can give you some additional color. And again, as it really to states the same thing, I think it's a little early to be able to call balls and strikes in terms of who and where leadership is because we're
Speaker Change: Again, this is a reminder to everyone, this is a pilot, this is a pilot for us, so we have kind of our first normalized and manufacturing run that is literally coming off the line right now in time for summer, and so we'll be able to provide you guys, I think some deeper color on on that next quarter.
Speaker Change: Great, thanks. And then, specific to Florida, I just want to ask around, Patient Count Grotes. It varies week to week, absurdly, but most of April was pretty strong. Any thoughts on...
Speaker Change: What's behind that, but beyond perhaps 420 and how sustainable growth might be in four together and give the penetrating training quality to die?
Speaker Change: and Haitian timeline behind legalization post amendment passes. So I think that, you know, we may have some rebound happening there and, you know, I will see, right? And again, I think we've got to kind of chart that out over the next.
Speaker Change: Call it three to six months. But, look, I mean Florida has, we have over 21 million residents, right? And as cannabis becomes more and more mainstream, you know, their of course is continued opportunity for Floridian to enter the program and to become patients, for sure.
Speaker Change: Thanks for that, I'll get back in the queue, congrats on the corner [inaudible]
Thanks.
Speaker Change: The next question is from Frederico Gomes with ATB Capital Markets. Please go ahead.
Good morning, thanks for saving my questions and regrets on the great quarter.
First questions.
Speaker Change: I think you spent over a century meeting in China at the political contributions this quarter, so just curious if you could provide any action at all Thank you very much.
Speaker Change: How do you think that? How much more capital do you intend to allocate to, I guess, other contributions through the year? And if, you know, that's already fully accounted for, you know, a gestural guidance for this year. Thank you
and Matthew McGinley. Thank you. Thank you.
Speaker Change: Sure. So our cash flow guidance is our cash flow guidance that incorporates everything that we see, you know, sitting here, sitting here today. So, yes, I would say the thought is that is fully baked guidance and other relates to the spend and this quarter as mentioned, right? There was some pretty significant and.
Speaker Change: efforts that were happening across those federal and in Florida specifically, and in Q1, 700,000 petitions have been collected for 2026 efforts, so I would not, what I would say is that
Speaker Change: You know, that is outsized for what we see moving forward and throughout the year, but this really is going to depend on
Speaker Change: What the opportunities are and what catalyst become clear and more in focus as the year continues. We do feel like it's important to be able to lean in and to invest as opportunities arise. Thank you very much.
Speaker Change: Thank you very much for that. And second question is just how you're thinking about M and A.
Speaker Change: and the current environment, we know the valuations are at all time lows in the public space, but I just curious how you've seen that and considering the cash you have on hand at the same time, some of your developing initiatives, how do you think about M&A as a capital location alternative? Thanks.
Speaker Change: Sure. So as you mentioned, we are absolutely focused on addressing the balance sheet this year, and we'll be doing that. And that being said, of course, we're always interested to understand what the opportunities are. They're out there. I am of the personal opinion that pricing is actually not as low as it's going to get.
Speaker Change: to pay that down like we do. And so I think those are going to be facing some tough decisions and that creates opportunity. And so I think that we are going to make sure that we're in a position to be opportunistic when this opportunity arrives. But end.
Speaker Change: I also think that there's no benefit here in not being patient.
Thank you very much [inaudible]
Thanks.
Speaker Change: The next question is from Bill Kirk with MKM Partners. Please go ahead.
Bill Kirk: Good morning, everybody. I had a question on 420-year-over-year. What were dollars year-over-year? And I asked because units were a pretty big acceleration over 1Q, yet the 2Q revenue guide is not as large of an acceleration over 1Q, so I'm curious what dollars were for 420-year-over-year.
Bill Kirk: Yeah, so we don't give specific dollars or revenue by holiday, but what I can tell you is right, I mean, 420 is one weekend.
Bill Kirk: and we have a whole quarter, right? And so, and you have to look at how the consumers reacting within that quarter, right? And so, what we've said is that we've said that, I mean, the good news here, is that we've got, you know, traffic increases, we've got, you know, strong retention. But what we also have is we have wallet pressure, and we have potential trade-down happening. So, P-Mix is a big part of that equation.
and in terms of what...
Bill Kirk: Could what we could see, right? And in K2. So it was a exceptionally strong 420 in terms of our ability to serve a bunch of customers and to continue to sell and have a number of transactions come through our platform across the country.
Bill Kirk: But again, there's this one weekend and there's a ton of other factors that play.
Bill Kirk: Okay, and as a follow-up on the THC beverages.
Bill Kirk: I believe you're allowed to pay retailer slotting fees for those alcohol is not allowed to pay slotting, so I guess are you seeing?
Bill Kirk: The emerging Delta 9 beverages paying for shelf space is like a way to establish themselves, you know, there's a lot of new entrance, so do they go pay, slotting to get established at retail accounts? And also, is that a way for THC beverages to kind of...
Bill Kirk: Take space from alcohol. Alcohol can't pay the retailers for shelf space and get it right from those alcohol brands.
Bill Kirk: Yeah, so again, we are not playing slotting, slotting these to date, and I do think that, you know, I think that that is varies by state-to-state, specifically as these states pass.
Ahhhhh!
Hemp Regulations and Regulatory Framework.
Bill Kirk: We're seeing the emergence of specific regulatory structures around and TAC beverages.
and in many cases that follow, you know, the free-tier topic systems.
Bill Kirk: So, you know, I don't necessarily believe that reliance on a flooding fee strategy is going to be a long-term sustainable strategy, not to say that, you know, in the short-term in certain states, perhaps it's being done again right now in our pilot, and in Florida, we are not seeing that.
Bill Kirk: We're not seeing that as a necessary or even widely used strategy among the infer in the T.H.C. beverage market.
I appreciate it. Thank you, Tim.
Nope.
Speaker Change: The next question is from Andrew Semple with echelon capital markets. Please go ahead.
Good morning, congrats on the two one results.
Speaker Change: My first question is just on the rebuttiveness of the supply chain with respect to terrorism.
Speaker Change: and potential tariff interruptions that we might see. Do you have any concerns on any of your top categories, resourcing, packaging, and other materials as it relates to the risk around
that held Trulieve's position throughout the year. [inaudible]
All right. All right. All right.
Speaker Change: Yeah, thanks. We've done a very robust analysis around potential tear impacts, and it's immaterial.
Speaker Change: for our organization. Again, Kudos to your supply chain team. They have had this on the radar for quite some time and have worked directly.
Speaker Change: with our suppliers to ensure that the impact, you know, when and if, would be minimal, and in fact, that is what has come to fruition. So, we feel good about our position on that.
Speaker Change: Great, okay, glad to hear. And my follow-up here would just be on the company's inventory balance. Dave and Vintori had been creeping higher this morning.
Speaker Change: and that continued into the first quarter of 2025. But that reflected the growth expectations or building any strategic inventory reserves.
Speaker Change: States, such as Pennsylvania, maybe head of the adult youths, both their legalization opportunities there. Maybe just some thoughts about the companies in this order position as it stands today would be helpful.
Speaker Change: Yeah, our inventory is in a place where we're fairly comfortable, it's going to fluctuate quarter to quarter and as it moves through the line we're different than some of our peers and that we deeply very strongly and bring in products through branded retail as a key cornerstone strategy.
Speaker Change: of ours, and as we mentioned, we've been increasing wholesale.
Speaker Change: in certain markets, and we have, depending on the particular state, we may be, you know, buildings to towards a launch of certain products, etc. So it's...
Speaker Change: You know, again, I think it's a normal fluctuation given our current strategic priorities across the platform.
Speaker Change: Great, that's helpful, thanks for taking my questions, I'll get back into queue
All right, thanks.
I'm sorry, I'm sorry, I'm sorry, I'm sorry, I'm sorry
Speaker Change: This concludes our question and answer session. I would like to turn the call back over to Christine Hersey for closing remarks.
Thanks everyone for your time today.
Speaker Change: We look forward to sharing additional updates during our next earnings call. Thanks again and have a great day.
Speaker Change: Thank you. The conference is now concluded. Thank you for attending today. It's presentation. You may now disconnect.