You should own this cannabis stock, analyst says

Beacon Securities analyst Russell Stanley reiterated his “Buy” rating and C$20.00 target on Trulieve Cannabis (Trulieve Cannabis Stock Quote, Chart, News, Analysts, Financials CSE:TRUL) in a Dec. 8 update, saying the company’s full redemption of its 8.0% senior secured notes demonstrates meaningful balance sheet flexibility ahead of a potentially catalyst-heavy 2025.

Tallahassee-based Trulieve is a multi-state operator active in nine states, with dominant market share in Florida and leadership positions in Pennsylvania and Arizona.

Stanley highlighted that Trulieve has now redeemed the entire US$368-million principal amount of its 2026 notes (8.0% coupon; 8.5% effective rate as of Q3) for US$373-million in cash including accrued and unpaid interest. The notes were delisted Friday. The company had flagged the planned redemption in early November after exiting Q3 with US$449-million in cash and equivalents.

“As discussed in our November 6th note, management has indicated it may issue up to $150-million in new debt, depending on terms and investor appetite,” Stanley said, adding that the firm’s cash balance and operating cash flow give it “significant flexibility” on whether any new issuance is required.

His Q4 estimates assume no new debt, putting cash/securities at roughly US$150-million and total debt/leases at US$940-million, for a fully diluted enterprise value of about US$2.0-billion.

Trulieve reiterated guidance for at least US$250-million in operating cash flow for fiscal 2025. With year-to-date OCF already at US$214-million (or US$43-million excluding the increase in its uncertain tax position), Stanley sees that outlook as increasingly conservative. His US$286-million forecast is modestly below the US$298-million consensus and assumes US$72-million in Q4 OCF.

He also pointed to long-term organic growth potential in Texas following Trulieve’s conditional award of a medical cannabis licence for Public Health Region 1. Texas, with 32-million residents, has a small but expanding medical program: registered patients rose 21% this year to 127,000, though penetration remains only 0.4%. Chronic pain was recently added as a qualifying condition — “an important step,” Stanley said — though THC levels remain capped at 0.5%. Even so, the state’s scale and gradually loosening regulatory environment make the licence “a nice win.”

Trulieve trades at 4.9× Stanley’s 2026 adjusted EBITDA forecast, a 26% discount to the 6.6× average for the four other major U.S. MSOs. He cited potential catalysts, including progress on Florida’s adult-use campaign, Q4 results and industry M&A.

Stanley forecasts Trulieve will generate US$1.19-billion in revenue and US$427-million in Adjusted EBITDA in fiscal 2025, followed by US$1.20-billion and US$415-million in 2026.

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