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Trulieve Cannabis Acquires Mountaineer Holding LLC; Street Sees 78% Upside

Medical cannabis company Trulieve Cannabis (TCNNF) has completed the acquisition of Mountaineer Holding LLC.  

Trulieve made a total payment of $6 million for this acquisition of which $3 million was paid in cash. The remaining payment was made by issuing 60,342 Trulieve subordinate voting shares.

The acquisition sets up Trulieve’s vertical integration into West Virginia and bolsters its national expansion with the addition of operations in its sixth state.   

Trulieve CEO Kim Rivers said, “We are pleased to complete this transaction quickly as the addition of Mountaineer achieves a significant presence for us in West Virginia. Our teams have already been at work in the state and adding Mountaineer to our portfolio provides significant potential for depth and scale.” (See Trulieve stock analysis on TipRanks)

Rivers added, “We look forward to serving West Virginia patients, and expect to be operational before the end of 2021.”

On April 28, Needham analyst Matt McGinley reiterated a Buy rating on the stock with a $60.75 price target (55% upside potential).

McGinley commented, “Trulieve has ~20% unit share, ~50% market share, and 80% of patients in FL are Trulieve customers. We estimate the medical cannabis market in Florida grows from ~$1.1B to ~$-2.5BI in 2024 and expect that potential changes to vertical integration requirements or adult-use legalization in Florida will benefit Trulieve.”

The company is expected to report 1Q results on May 13. McGinley expects to see “strong topline and EBITDA growth” on the back of growth in Florida operations and benefits from recent acquisitions.

Based on 9 unanimous Buys, consensus on the Street is that Trulieve is a Strong Buy. The average analyst price target of $69.74 implies 78% upside potential. Owing to heightened investor interest in Cannabis stocks, Trulieve shares have seen an approximate 301% gain over the past year.

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