One of the largest U.S.-based cannabis retailers made news today when it released its financial results. Focused on expanding as quickly as possible, Curaleaf Holdings (OTC: CURLF) made a number of highly expensive acquisitions this year to aggressively expand their operations. Following two costly deals that totaled around $2 billion, the end result of these expenditures was that Curaleaf ended up seeing lower-than-expected Q2 revenue figures. However, the company is now forecasting over $1 billion in revenue for 2020, a figure that is making many investors incredibly excited about Curaleaf.
Overall, Curaleaf’s losses widened to a net loss of $24.4 million, or 5 cents per share. This has grown significantly from last year, where losses were just at $4.9 million. Net revenue rose to $48.5 million as opposed to the $14.6 million seen a year ago. This was a little shy of what most analysts were expecting, with the average expected revenue coming in at $49.8 million.
“We have made significant progress over the last few months in executing on our strategy to become the leading vertically integrated multi-state cannabis operator in the United States,” said Joseph Lusardi, Chief Executive Officer of Curaleaf in a press release. “The recently announced acquisitions of Select and Grassroots, as well as tuck in acquisitions in Arizona, California, Nevada and Ohio position Curaleaf as the undisputed leader in the cannabis industry. With the industry’s largest operational footprint, we have the scale to rapidly accelerate growth across the country. I continue to believe Curaleaf is the best positioned operator in the cannabis space with the potential to create substantial shareholder value.”
For the most part, investors are getting fed up with cannabis companies not reporting any profits. While this might have been acceptable back in 2018, many who have paid hefty premiums into these pot stocks are now expecting these companies actually have something meaningful to report, rather than just continuing to boast impressive revenue figures. However, Curaleaf might be able to get away with this for a while longer, being one of the largest American retailers in the country. Curaleaf executives went on to say that they expect the company’s 2020 revenue figures to come in somewhere between $1 billion and $1.2 billion, an extremely impress forecast that is enough to make most investors forget about the lack of profits from Curaleaf for a little while longer.
Shares of Curaleaf didn’t respond much to the news, barely inching up only one percent in response to the news. Over the past few months, shares have fallen from their previous high around $11 to its current price at $6.4 per share. However, most analysts remain highly optimistic for the company despite what is seen as a temporary letdown in revenue for the short-term.
Curaleaf Company Profile
Curaleaf is headquartered in Wakefield, Massachusetts, and cultivates and sells medicinal and recreational cannabis in the U.S. The company has operations in 19 states, including the assets from the Cura Select and Grassroots acquisitions. Curaleaf offers multiple products under three brands: Curaleaf, Curaleaf Hemp, and UKU Craft Cannabis. The company does not currently export into the global medical market as Canadian cannabis producers typically do. – Warrior Trading News
