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Friday, November 27, 2020

What Lies Ahead for Curaleaf Holdings Inc (OTCMKTS:CURLF)?

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Curaleaf Holdings Inc (OTCMKTS:CURLF) just reported its financial and operating results for the second quarter ended June 30, 2020, featuring managed revenue of $121.4 million, which grew 120% year-over-year and 16% sequentially, despite estimated $25.6 million revenue related impact from COVID-19 largely in Nevada and Massachusetts, and record total revenue of $117.5 million, which grew 142% year-over-year and 22% sequentially.

Joseph Lusardi, Chief Executive Officer of Curaleaf stated “Curaleaf, once again, delivered record quarterly results highlighted by managed revenues exceeding our outlook, as well as, a 40% sequential improvement in Adjusted EBITDA. The outstanding results come despite headwinds related to temporary COVID-19 related closures and restrictions in Massachusetts and Nevada. After quarter end, we successfully completed the transformative acquisition of Grassroots, expanding our presence into 6 new states, including the high-growth Illinois and Pennsylvania markets. The closing of Grassroots affirms our position as the world’s largest cannabis company when measured by both revenue and operating presence. Overall, Curaleaf remains well positioned for continued growth in the second half of 2020. This growth will be driven by organic initiatives, the integrations of the Select and Grassroots businesses, as well as, the closing of multiple strategic tuck-in acquisitions across a number of key states.”

Curaleaf Holdings Inc (OTCMKTS:CURLF) promulgates itself as a company that operates as an integrated medical and wellness cannabis operator in the United States.

The Company is the parent of Curaleaf, Inc., a leading vertically integrated cannabis operator in the United States. Headquartered in Wakefield, Massachusetts, Curaleaf, Inc. has a presence in 12 states.

Curaleaf, Inc. operates 30 dispensaries, 12 cultivation sites and 9 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey, and New York. Curaleaf, Inc. leverages its extensive research and development capabilities to distribute cannabis products in multiple formats with the highest standard for safety, effectiveness, consistent quality and customer care. Curaleaf is committed to being the industry’s leading resource in education and advancement through research and advocacy.

Curaleaf Inc.’s Florida operations were the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence.

It cultivates, processes, markets, and/or dispenses a range of cannabis products in various operating markets, including flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles.

The company also provides non-cannabis services to licensed cannabis operators in the areas of cultivation, extraction and production, and retail operations. As of November 01, 2018, it operated a network of 29 dispensaries. The company was founded in 2010 and is headquartered in Wakefield, Massachusetts.

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As noted above, CURLF just reported its financial and operating results for the second quarter ended June 30, 2020, featuring managed revenue of $121.4 million, which grew 120% year-over-year and 16% sequentially, despite estimated $25.6 million revenue related impact from COVID-19 largely in Nevada and Massachusetts, and record total revenue of $117.5 million, which grew 142% year-over-year and 22% sequentially.

The chart shows 22% during the past month in terms of shareholder gains in the name. In addition, the company has seen a growing influx of trading interest, with the stock’s recent average trading volume running just under 110% over the long run average.

Mike Carlotti, Chief Financial Officer of Curaleaf, added “Our top-line growth drove record adjusted EBITDA and an improved adjusted EBITDA margin. The strength of our balance sheet has allowed us to invest in our base business and opportunistically pursue additional strategic acquisitions. Looking forward, we anticipate a continued rise in managed revenue and adjusted EBITDA leading to strong sequential growth in the third quarter and second half of 2020 driven by organic growth, continued investment in key states, as well as, the integration of Select, Grassroots, Arrow and BlueKudu into our portfolio. Finally, we continue to make progress in converting and consolidating our managed entities in Maine, New Jersey and Massachusetts. As of today, we have consolidated all of our managed entities except for ATG which we expect to consolidate in the third quarter.”

Now commanding a market cap of $4.95M, CURLF has a significant war chest ($251M) of cash on the books, which compares with about $177.1M in total current liabilities. One should also note that debt has been growing over recent quarters. CURLF is pulling in trailing 12-month revenues of $375.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 177%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $CURLF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CURLF, either long or short, and we have not been compensated for this article.

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