Trulieve Cannabis (TRLV) just became one of the first operators to secure Drug Enforcement Administration registrations for its medical dispensaries, following cannabis reclassification to Schedule III under the Controlled Substances Act.
The DEA registrations have arrived after a sharp run in Trulieve Cannabis shares, with the 90 day share price return of 36.7% and year to date share price gain of 32.6% pointing to building momentum around the new federal framework. That move sits on top of a 1 year total shareholder return of 74.3% and a 3 year total shareholder return of 142.9%, even though investors who have held for 5 years still face a total shareholder return decline of 59.3%.
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Bulls see Trulieve Cannabis as an early winner from Schedule III, while bears point to revenue decline and heavy losses. Which story do the current valuation markers support next?
Most Popular Narrative: 37% Undervalued
Against a last close of $11.54, the most followed narrative puts Trulieve Cannabis fair value at $18.18. This frames the recent share price strength as still leaving a valuation gap on the table.
A strong cash position of US$353 million against US$290 million in debt and positive free cash flow of US$42 million in the quarter provide room to fund new stores, production upgrades and possible acquisitions, which can influence future revenue and earnings power.
See why 8 investors see Trulieve Cannabis as 37% undervalued.
Result: Fair Value of $18.18 (UNDERVALUED)
Still, the Trulieve Cannabis story can change quickly if federal tax relief from rescheduling proves more limited than hoped, or if ongoing revenue decline continues to pressure margins and cash generation.
Find out about the key risks to this Trulieve Cannabis narrative.
Next Steps
Mixed signals around Trulieve Cannabis often spark strong views, so consider both the potential upside and the concerns, and ground your own thesis with the 3 key rewards and 1 important warning sign.
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