U.S. pot producer Curaleaf Holdings extended America’s winning streak over the Canadian competition by reporting March quarter sales that far exceeded those turned in by Canada leaders like
After Monday’s close, Curaleaf announced $96.5 million in quarterly sales, up 28% from December’s number. Cash flow from operations rose 45% sequentially, to $20 million.
Once Curaleaf closes its pending acquisition of the rival chain Grassroots, Curaleaf will be the world’s largest cannabis company, chief executive Joe Lusardi said in the announcement. In the day’s trading before the earnings release, Curaleaf stock (ticker: CURA.Canada) gained 12% on the Canadian Securities Exchange to close at 8.32 Canadian dollars (or US $5.87).
The Massachusetts-based Curaleaf is also in the process of converting some not-for-profit cannabis operations that it manages into fully-owned for-profit subsidiaries. Counting the sales of those managed units, March quarter revenues were $105 million—a hair ahead of the $103 million reported last week by Chicago-based Green Thumb Industries (GTII.Canada) and far more than the $54 million turned in by Aurora Cannabis (ACB).
Curaleaf still ran a loss on the quarter of $15 million, or 3 cents a share. As noted, there were $20 million in earnings before interest, taxes, depreciation and amortization, or Ebitda, as well as noncash items like stock compensation and charges deemed “one time.” The similarly-calculated Ebitda in December’s quarter was $14 million.
March results were about what analysts expected, with sales slightly above the $94 million consensus forecast compiled by FactSet. The $20 million Ebitda exceeded the $15 million expected—but the reported number excludes $11.2 million in one-time charges, so predicting results was hard for analysts.
Despite Massachusetts’s suspension of recreational sales during the Covid-19 crisis, Curaleaf expects June quarter sales to be above those of March. That guidance pleased Stifel GMP analyst Rob Fagan, who thinks the stock can double. At MKM Partners, Bill Kirk is less smitten. He sees the company encountering stiff competition in Florida’s growth market, and rates the stock a Neutral with a price target of C$6.50.
Write to Bill Alpert at firstname.lastname@example.org