Trulieve Cannabis Corp. (CSE: TRUL) released its third-quarter earnings report today, presenting financial data that reflects both growth and ongoing challenges in a period marked by significant investments in Florida’s adult-use cannabis campaign.

In the third quarter, Trulieve reported revenues of $284 million, marking a 3% increase from the $275 million reported during the same period in 2023. However, the company saw a sequential decline of 6% from the $303 million recorded in Q2 2024.

Trulieve’s gross margin rose to 61% in Q3 2024 from 52% in Q3 2023. The quarter’s GAAP gross profit came in at $173 million, up 21% from the $143 million recorded a year ago, yet down 5% from Q2 2024’s $182 million.

The company’s net loss for Q3 2024 widened significantly by 137% to $60 million, compared to a $25 million loss in Q3 2023. Adjusted for non-recurring expenses, including a $48 million investment supporting Florida’s “Yes on 3” adult-use legalization campaign, the adjusted net loss stood at $12 million.

This campaign expenditure underscores Trulieve’s strategic focus on Florida, its largest market, where the transition to adult-use cannabis could significantly increase revenues. Without the campaign expenditure, the company’s losses might have shown a marked improvement over last year.

As Florida voters head to the polls to decide on legalizing recreational cannabis, Trulieve’s CEO Kim Rivers emphasized the company’s readiness for potential market expansion, saying, “With 156 stores in Florida, scaled production capacity, and sufficient capital to support further investment, if approved, Trulieve is best positioned to fully prepare for the launch of recreational sales next Spring.”

Trulieve’s adjusted EBITDA reached $96 million, a 24% year-over-year increase and representing 34% of revenue, signaling operational efficiency gains despite campaign-related expenses.

Operating expenses jumped by 44% to $173 million in Q3 2024, up from $120 million in Q3 2023. This increase brought operating expenses to 61% of total revenue, a sharp rise from the previous year’s 43%. On a sequential basis, operating expenses rose by 31% compared to Q2 2024.

Trulieve’s expenditure surge is largely driven by adult-use campaign contributions, expansion costs, and heightened general and administrative expenses. The increase in G&A expenses alone, from $34.5 million in Q3 2023 to $81.9 million in Q3 2024, reflects the company’s ambitious growth strategies and market preparation efforts.

For the quarter, Trulieve generated $30 million in cash flow from operations, a stark decrease from the $93 million in Q3 2023. Free cash flow also dipped into negative territory at -$7 million, down from $87 million in Q3 2023, primarily due to the $48 million campaign support. Year-to-date, cash flow from operations reached $241 million, underscoring the company’s overall financial health despite recent quarterly fluctuations.

At the end of Q3, Trulieve held $319 million in cash and short-term investments, an increase from $201 million at the close of 2023.

In Q3 2024, Trulieve opened 15 new dispensaries, primarily in Florida and Pennsylvania, pushing its total store count to 215. Notably, 30% of Trulieve’s dispensaries are now located outside Florida, marking progress in the company’s national expansion strategy. Furthermore, Trulieve initiated adult-use sales at three locations in Ohio and partnered with the Professional Pickleball Association and Major League Pickleball to boost brand visibility.

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