Trulieve Cannabis (TRLV) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01Cannabis is illegal under United States federal law
2. 02The regulation of cannabis in the United States is uncertain
3. 03We may be subject to constraints on and differences in marketing our products under varying state laws
4. 04The cannabis industry is relatively new
5. 05We face risks due to industry immaturity or limited comparable, competitive or established industry best practices
6. 06Our ability to grow our medical and adult-use cannabis product offerings and dispensary services may be limited
7. 07We may acquire other companies or technologies
8. 08If we cannot manage our growth, it could have a material adverse effect on our business, financial condition and results of operations
9. 09Anti-Money Laundering Laws in the United States may limit access to funds from banks and other financial institutions
10. 10We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance
11. 11The reclassification of cannabis or changes in U.S. controlled substance laws and regulations could have a material adverse effect on our business, financial condition, and results of operations
12. 12Potential regulation by the FDA could have a material adverse effect on our business, financial condition and results of operations
13. 13Our contractual arrangements may not be as effective in providing control over the variable interest entities as direct ownership
14. 14We could be materially adversely impacted due to restrictions under U.S. border entry laws
15. 15Our existing operations in the United States, and any future operations, may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the United States and Canada
16. 16We expect to incur significant ongoing costs and obligations related to our investment in infrastructure, growth, regulatory compliance and operations
17. 17The market for the Subordinate Voting Shares may be limited for holders of our securities who live in the United States
18. 18We may not be able to locate and obtain the rights to operate at preferred locations
19. 19As a cannabis business, we are subject to certain tax provisions that have a material adverse effect on our business, financial condition and results of operations
20. 20We expect to be subject to taxation in both Canada and the United States, which could have a material adverse effect on our financial condition and results of operations
21. 21We may be at a higher risk of IRS audit
22. 22We may not have access to United States bankruptcy protections available to non-cannabis businesses
23. 23We are a holding company and our ability to pay dividends or make other distributions to shareholders may be limited
24. 24There is doubt regarding our ability to enforce contracts
25. 25We face increasing competition that may materially and adversely affect our business, financial condition and results of operations
26. 26We are subject to limits on our ability to own the licenses necessary to operate our business, which will adversely affect our ability to grow our business and market share in certain states
27. 27Our subsidiaries may not be able to obtain or maintain necessary permits and authorizations
28. 28We may not be able to accurately forecast our operating results and plan our operations due to uncertainties in the cannabis industry
29. 29We are subject to risks related to growing an agricultural product
30. 30We may encounter unknown environmental risks
31. 31We may not be able to adequately protect our intellectual property
32. 32Our property is subject to risk of civil asset forfeiture
33. 33Our internal controls over financial reporting have not historically been effective, and our independent auditors may not be able to certify as to their effectiveness, which could adversely affect our business results and operations
34. 34We are highly dependent on certain key personnel
35. 35We face inherent risks of liability claims related to the use of our products
36. 36We face risks related to our products
37. 37Our medical marijuana business may be impacted by consumer perception of the cannabis industry, which we cannot control or predict
38. 38Product recalls could result in a material and adverse impact on our business, financial condition and results of operations
39. 39We are subject to security risks related to our products as well as our information and technology systems
40. 40We face exposure to fraudulent or illegal activity by employees, contractors, consultants and agents, which may subject us to investigations and actions
41. 41Our reputation and ability to do business may be negatively impacted by the improper conduct by our business partners, employees or agents
42. 42We may have increased labor costs based on union activity
43. 43We could be subject to criminal prosecution or civil liabilities under RICO
44. 44Our significant indebtedness may adversely affect our business, financial condition and financial results
45. 45We may be unable to obtain adequate insurance coverage
46. 46We rely on key utility services

Risks Related to Owning Subordinate Voting Shares

1. 47A return on our securities is not guaranteed
2. 48Additional issuances of Multiple Voting Shares or Subordinate Voting Shares may result in further dilution and could have anti-takeover effects
3. 49Sales of substantial amounts of Subordinate Voting Shares by our existing shareholders in the public market may have an adverse effect on the market price of the Subordinate Voting Shares
4. 50The market price for the Subordinate Voting Shares has been and is likely to continue to be volatile
5. 51There may not be sufficient liquidity in the markets for our Subordinate Voting Shares

Risks Related to Being a Public Company

1. 52We are subject to increased costs as a result of being a U.S. reporting company