Publicly traded cannabis firms have different levels of profits and cash on hand

Cash on hand represents how much of a cushion a company has readily available to maintain operations—even in the face of losses. Companies with high cash-burn rates, such as Denver-based Schwazze (see page 18), are at higher risk of missing out when expansion opportunities arise or not being able to respond to adverse conditions.

Having a high level of cash on hand doesn’t necessarily mean a company is operating well. California-based Terra Tech Corp., for example (see page 18), has a relatively low level of cash on hand, but that level has been steady over the past three report-ing periods—meaning the company has been operating within its means.

When compared to the other publicly traded marijuana firms (see page 18), Florida-based Trulieve is an anomaly. In addition to being able to build its significant cash reserve over the past three reporting periods, it has maintained a profitable operation over time.

The company’s net profits decreased during the first six months of 2020, primarily because of a decision not to do a spring plant, which resulted in less product inventory. Even with the declining trend, the company has remained above the crucial break-even line.