It’s been almost six months since I last wrote here about Trulieve Cannabis (OTCQX:TCNNF), calling out its excellent entry point then at $3.87. Indeed, it was, but is it a buy at the higher price now of $5.61? In this piece, I discuss why it has rallied, review the two quarterly reports since my last article, assess the updated outlook, look at the chart and dig into the valuation of Trulieve relative to its peers as well as outright.
Why Trulieve Rallied
Trulieve is not at the highest point since my article in early June, but has appreciated by 45%. The move is fully explained by the late-August move of the Department of Health & Human Services to get cannabis moved from Schedule 1 to Schedule 3 by the DEA. The reason that this could be so good is that if the DEA does that, then the onerous 280E taxation would go away, providing a big boost to the cash flow due to lower tax payments.
Investors should not assume that this will happen soon or even at all. If the DEA were to go to Schedule 2, then 280E would remain. Even with Schedule 3 and