Know More Insight About Trulieve Florida’s Marijuana GiantOn January 19, 2022 by Melissa Castillo
More than half of the smokable cannabis provided to patients in Florida was sold by the online dispensary company last month. It has had 14 consecutive profitable quarters. In the most recent quarter, the corporation brought in more than $215 million in revenue. Trulieve is in the process of buying another medical marijuana company, Harvest Health & Recreation, in a deal that would make it the country’s largest and most profitable cannabis company, according the company.
Trulieve, on the other hand, experienced its first serious public relations disaster this summer. In a highly publicized trial in August, J.T. Burnette, the husband of CEO Kim Rivers, was found guilty of five of nine federal corruption-related offenses.
Burnette was called to the stand to address questions regarding a taped discussion he had with undercover FBI agents in which he boasted about helping legislators create the 2014 statute that allowed Trulieve to enter the Florida market. Former state Rep. Halsey Beshears, one of those lawmakers, is the brother of a Trulieve board member. Rivers was subpoenaed for information in the case, however, it was about a separate business operation than Trulieve.
From the start of the trial until Wednesday, the company’s stock was down around 29%.
Even if the Burnette case has harmed Trulieve, Florida industry experts say they don’t anticipate the firm to be stymied for long.
“When it comes to Trulieve, no one mentions J.T. Burnette.” “They talk about Kim Rivers,” said Ben Pollara, a political consultant who assisted in the development of the Florida constitutional amendment that resulted in a significant expansion of the medical cannabis program in 2016. “The only people who talk about J.T. Burnette are others in the profession who are wishing for his return.”
Other prominent cannabis companies’ stocks have also fallen in recent weeks, according to Steve Vancore, a Trulieve spokeswoman. From mid-July to Wednesday, Curaleaf, for example, was down 15%.
Burnette’s case did appear to represent a threat to Trulieve’s top executive at one point. In a filing with the Securities and Exchange Commission on Jan. 21, the company warned of the potential ramifications for Rivers if she was linked to her husband’s case.
“Ms. Rivers may be unable to continue serving as our President and Chief Executive Officer and a member of our board of directors if the Agency inquiry results in any accusation of wrongdoing or otherwise targets Ms. Rivers,” the filing stated.
Trulieve, Florida’s largest medicinal cannabis company, is led by Kim Rivers. [Believe it]
Rivers appears to be in authority as the corporation emerges from the trial. Vancore stated that the company and Rivers are not facing any legal issues.
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“Burnette is unrelated to Trulieve’s business, and this scenario has no influence on Trulieve or its CEO, Kim Rivers,” Vancore stated.
From the beginning, you’ve been on top.
On the second-to-last day of the 2014 parliamentary session, House legislators ripped up, then rewrote a bill that would enable marijuana to be cultivated and sold to a small number of very ill people once it had been stripped of its major euphoric element. Their decisions would ultimately determine the industry’s fate.
A bill drafted by then-state Rep. Matt Gaetz put up major barriers to entry into the medical marijuana sector. The bill’s original Senate version permitted Florida’s Department of Health to design an application procedure that limited the number of businesses that may apply for a license. Out-of-state enterprises would be eligible to apply. Only a few of the state’s largest farms were allowed to participate in the medical marijuana industry under the Gaetz amendment, which was enacted by the House. To be eligible for a license, a nursery had to have been in the state for at least 30 years and nurture at least 400,000 plants.
Five of those early cannabis licenses would be issued by the state, one for each of the state’s five regions. Three nurseries banded together in 2015 to apply for one of those licenses as Hackney Nursery. They were granted a license, and the company was renamed Trulieve.
Although the corporation is now incorporated in Canada, its corporate headquarters are located in Quincy, some 7,000 miles northwest of Tallahassee. Trulieve now has stores in six states and plans to build more in Georgia in the near future.
Prosecutors questioned Burnette about comments he made to undercover FBI agents claiming he and his longtime friend, Rep. Beshears, helped draft the legislation during his trial last month.
According to the Tallahassee Democrat, Burnette told federal authorities in 2016: “Well, Halsey and I worked through it.”
Thad Beshears, Beshears’ brother, owned one of the farms that applied for the inaugural Hackney Nursery license. Thad Beshears is now a member of the Trulieve board of directors. According to SEC filings from earlier this year, he holds around 20% of the company’s equity. The stock price affects the value of his ownership in the company. It was valued at around $390 million as of late August.
Burnette testified to the jury that his previous statement to the FBI was false. He claimed he was taking credit for something that had happened years before.
Vancore responded “no” when asked if any future Trulieve executives or their wives had a hand in drafting Florida’s first marijuana law.
Gaetz, who is now a member of the United States Congress, informed the Times/Herald that he has never met Rivers or Burnette. He said they had no input into the creation of his bill all those years ago. According to Gaetz, the 30-year nursery requirement and the 400,000-plant threshold were added to the law to win over conservative Republican farmers, who were vital to the bill’s passing.
“There was significant opposition to cannabis when I drafted Florida’s first cannabis statute,” Gaetz added. “To get a majority vote to pass the bill, I was skating on very thin ice.”
Beshears, who was previously the director of Florida’s Department of Business and Professional Regulation, declined to comment. Gaetz, a Fort Walton Beach Republican who served in the Legislature alongside Beshears, pointed out that lawmakers like Beshears had no say in the Department of Health’s decision to grant Hackney Nursery its initial license.
Gaetz is apparently being investigated by the federal government for sex trafficking, which he has denied.
The first to the market
Trulieve was able to extend the range of items it offered consumers as Florida legislators and voters expanded the state’s medicinal cannabis business.
The company was grandfathered into the state’s 2015 program to sell marijuana to terminally ill patients that included the euphoric component. Other businesses who applied for state licenses were stymied by costly litigation, while Trulieve focused its efforts on expanding and expanding its retail operations.
Trulieve had launched its first dispensary in 2016 – before voters had even approved a major expansion of Florida’s cannabis program.
According to Vancore, the company is proud of its track record of outperforming the competition. Trulieve was the first to grow medical marijuana and the first to deliver it. Trulieve was also the first to market when Gov. Ron DeSantis passed a measure permitting smokable cannabis for the first time.
Rivers, the company’s CEO, is credited with the company’s vision, according to Vancore. Rivers was not available for an interview with the company.
The corporation enlisted the services of various construction companies as it expanded. Burnette Construction, which J.T. Burnette created and maintains a minority ownership in, was one of them. For years, Trulieve has minimized the connection between Burnette and the marijuana industry. The business agreement is “totally independent” from the FBI’s prosecution against Burnette, firm officials wrote to investors in 2019. Trulieve even went so far as to sue Grizzly Research for libel when it claimed Trulieve was involved in Burnette’s case. The conclusion of that case is still pending.
Gaetz stated that he has no financial interest in the Florida cannabis market, but that he regularly monitors it. Trulieve, he believes, has thrived because it was one of the first companies to invest in cannabis as a product.
“Trulieve commoditized marijuana faster than any of the other original market players,” Gaetz added.
A new day has arrived, as well as a new bargain.
Trulieve’s most recent acquisition could put the company in front of even more clients than before. However, they may require government assistance.
In May, the firm announced that it had struck an agreement to purchase Harvest Health & Recreation Inc., one of the Department of Health’s 22 medical marijuana treatment clinics. Harvest is also well-represented in four additional states.
Harvest will auction off its state-issued license as part of the agreement. The competitive bidding procedure has already begun. That license is almost expected to fetch tens of millions of dollars when it comes up for sale.
Harvest’s ownership would have to be approved by the state. However, according to a letter published on Aug. 11 by Christopher Ferguson, the director of the state’s Office of Medical Marijuana Use, the initial signals are promising. According to Ferguson, the change in ownership “would be allowed” if Harvest transfers the license to a corporation that complies with state regulations.
According to her 2020 financial statement, Florida Agriculture Commissioner and Democratic governor candidate Nikki Fried has a $130,000 investment in Harvest. If she wins the governor’s contest in 2022, she has promised to divest that interest.
But, even as Trulieve considers its latest acquisition, a greater prize is on the horizon. The corporation is still preparing for the day when recreational marijuana is legalized in Florida.
According to campaign finance records, the corporation has donated $33,500 to a political committee supporting a state constitutional amendment ballot proposition to legalize recreational cannabis over the years. Sensible Florida is supporting the initiative, which allows Floridians to grow the plant at home. The Florida Supreme Court ruled in June that the language used in that endeavor was unconstitutional, thus killing legalizing efforts.
Nonetheless, Trulieve’s track record in other places where marijuana is legal suggests that it will be well positioned once Florida — or the federal government — legalizes the drug. Customers in Massachusetts can now order cloned cannabis plants to cultivate and harvest at home, the company announced earlier this month.
Furthermore, the firm has strong political ties. The firm’s lobbyist is Nick Iarossi, a strong Tallahassee entrepreneur with close links to DeSantis. Observers of the sector believe Trulieve has the financial and political clout to get where it wants to go.
“I think it’s a very strong company, and I don’t think they’re going anywhere,” said attorney Jonathan Robbins, who has previously represented the firm. “I tell you this based not on information I’ve gotten from representing them, but information I’ve gotten because I closely follow the industry,” he added. “If you were to interview 50 cannabis attorneys, lobbyists, or anybody else knowledgeable with the sector… “I don’t believe anyone would tell you otherwise.”