A new indication of growing pains within the industry comes from a report published by Siegried Eggert of Geoinvesting, which alleges a list of misdeeds by the company Trulieve.
The 26 pages long report explores in depth a series of alleged malpractices carried out by the company during its years of activity. "We found extensive ties between Trulieve and ongoing FBI investigations into corruption in North Florida," the report reads. "Trulieve’s initial license approval stinks of corruption and involved multiple undisclosed conflicts of interest. CEO Kim Rivers’ husband, JT Burnette is at the very center of the FBI probe, he is the right-hand man of disgraced politician Scott Maddox, and an integral part to the criminal enterprise accused of charges ranging from racketeering to falsifying statements"
"Our research indicates that Burnette is Trulieve’s key construction partner. Burnette’s construction firms were also called out in the subpoena and are involved in scandals involving public funds in North Florida. There are several undisclosed related party transactions, where Burnette affiliated companies sold real estate to Trulieve at a huge profit. Trulieve lies about the nature of its lenders, and depicts some of them as third parties that we could trace back to insiders. Also, all but one lender used shell entities that show no other activities."
They continue: "Given the opaque set up and lies Trulieve told about its financing sources we are deeply worried what Trulieve is hiding. Inkbridge, a lender of Trulieve that is controlled by Kim Rivers, is known for using government funds to finance ventures. There are also reports of shady foreign individuals trying to get a foothold in Florida’s medical marijuana industry. We ask: Where did the money really come from?"
"The company’s portrayed profitability relies on mark-ups on their grown product, which we believe to be highly suspect in-light of our findings. Also, the company takes out tiny loans from insiders when it is supposedly swimming in cash. Trulieve is facing several economic headwinds, such as increasing competition. With the low-quality production facilities we uncovered, we believe Trulieve will not be able to compete."
Trulieve response did not wait to come. "[We are] aware of a short-seller report which contains several false, slanderous and misleading statements about Trulieve," the team with the company points out. "Trulieve’s successful and profitable business model is supported by several respected and reputable analyst firms, and as a publicly traded company its financial activity is communicated regularly and accurately to the investment community. The quality of Trulieve’s products and production facilities has never been in question, as evidenced by more than 230,000 satisfied customers in the Florida market. It appears today’s report is a disingenuous attempt to manipulate Trulieve’s stock price, and the Company is planning to pursue legal action against this outlet, which has no history or credibility in assessing cannabis companies."
Kim Rivers, the Chief Executive Officer of Trulieve, remarked, “We ask that our investors be aware that the Report reflects the opinions of an acknowledged short seller, whose sole interest is in profiting from a decline in the price of the Company’s shares. I have full confidence in our management team and their abilities to continue to serve our customers without being distracted by these baseless allegations. Trulieve reserves all of its rights to take appropriate legal action against those responsible for the Report.”
Rivers continued, “Trulieve sells high quality flower, cultivated in our indoor facilities, and was recently recognized by an award from the Cannabis Business Association of having the best flower in Florida. We stand behind the quality of our products and have a long-standing no-questions-asked return policy. Trulieve set a record for flower sales in Florida just last week, capturing over 51% of the market.”