Curaleaf Record Earnings

Third quarter revenues for major cannabis operator Curaleaf totaled $182.4 million, representing a new all-time record for earnings by the company in a single quarter. Additionally, the future for Curaleaf looks even brighter after the cannabis company completed its acquisition of competitor Grassroots Cannabis.

Curaleaf Revenues on the Rise in 2020

Curaleaf has seen its revenues and profits trending upward in 2020. Curaleaf’s Q3 revenues, which officially ended on September 30, increased by approximately 55% over the cannabis company’s Q2 revenues, and increased by a remarkable figure of 195% year over year when compared to Q2 in 2019. Those numbers come directly from Curaleaf’s financial and operating results, which were recently released by the company.

Curaleaf’s pro forma revenue in the third quarter of 2020 was $215.3 million. This was a record high for the cannabis operator. “Pro forma revenue” refers to the company’s managed revenue plus revenue from businesses that Curaleaf acquired. Curaleaf’s pro forma revenue for the third quarter includes revenue from the company’s recent acquisitions of Arrow Alternative Care and Grassroots Cannabis, which were both completed during Q2.

Curaleaf’s managed revenue in the third quarter was $193.2 million. “Managed revenue” is defined as total company revenue, as well as revenues from businesses that Curaleaf manages. The company saw a strong increase in managed revenue of 59% over the second quarter in 2020 and 164% over the third quarter in 2019. Mike Carlotti, Curaleaf’s Chief Financial Officer, said that the company anticipates “a continued rise in managed revenue” in the fourth quarter and in 2021 as Curaleaf completes its acquisition of Alternative Therapies Group in Massachusetts.

Curaleaf’s adjusted EBITDA in the third quarter was also a record high for the company: $42.3 million. Adjusted EBITDA includes earnings before interest, taxes, depreciation, and amortization. According to Curaleaf financial data, adjusted EBITDA in Q3 2020 was up 51% over Q2 2020, and a whopping 305% year-over-year increase when compared to Q3 2019.

Cannabis Sales and Profits Increase as Curaleaf Expands into New Markets

Gross profits for Curaleaf from retail cannabis sales in Q3 2020 were almost $90 million. This was a 110% increase over Q2 2020, and a massive 280% increase over gross profits from cannabis sales in Q3 2019. The surge in retail revenue was driven largely by the company’s continued growth and expansion, which included multiple new dispensary openings in Florida. Curaleaf also launched the Select brand in Illinois, Ohio, and Pennsylvania.

The strong sales revenues for Curaleaf came as the cannabis business scaled and operated dispensaries across 17 states. Moreover, Curaleaf continues to scale with an eye toward future growth, as the company recently expanded its marijuana retail sales presence to 23 states thanks to the acquisition of Grassroots Cannabis.

In addition to acquiring several major cannabis brands and companies, Curaleaf also continued to improve the operating capacity and efficiency of its own existing cannabis cultivation and processing facilities.

Curaleaf Thrives Despite Coronavirus Impact on Cannabis Market

The surge in profits for Curaleaf came even as the company was affected by the coronavirus pandemic, much like other businesses that depend on retail sales. Curaleaf sustained an estimated adverse impact of $25.6 million due to temporary store closures caused by the COVID-19 pandemic, as well as restrictions placed on retail businesses in states like Massachusetts and Nevada where Curaleaf has a significant presence.

Some of the third quarter highlights for Curaleaf included:

  • Launched the Select brand in three (3) new states. Select is a popular cannabis concentrate brand with a dominant footprint in numerous state and regional markets.
  • Completed merger with Grassroots Cannabis. This acquisition has the immediate effect of making Curaleaf the largest cannabis company in the world in terms of both revenue and operating presence. The merger with Grassroots also allowed Curaleaf to expand their presence into six (6) new states, including flourishing cannabis markets in Illinois and Pennsylvania.
  • Completed acquisition of Maine Organic Therapy assets. Curaleaf was already managing these assets, but now the merger of the two companies has been finalized and Maine Organic Therapy has been officially integrated into Curaleaf. Curaleaf has converted and consolidated nearly all of the company’s managed entities, and Curaleaf expects to consolidate the rest of its managed entities in the fourth quarter of 2020.

Curaleaf Sale-Leaseback Deals Provide Additional Cash Flow

According to a press release issued by Curaleaf, the company generated significant cash flow from operations in the third quarter of 2020. Curaleaf reportedly has access to around $85 million in cash.

Curaleaf has continued to complete sale-leaseback deals. These types of transactions allow cannabis operators like Curaleaf to immediately improve their cash flow. For example, Curaleaf was able to raise around $41 million in net proceeds from sale-leaseback transactions in the third quarter of 2020.

The Future Looks Bright for Curaleaf

Curaleaf is the largest vertically integrated multi-state cannabis operator in the United States, with cannabis cultivation sites, cannabis processing facilities, recreational marijuana dispensaries, and medical marijuana dispensaries fully operational in 23 states. Curaleaf is a cannabis industry leader with a strong reputation for providing high-quality products and offering manufacturing and cultivation expertise. Additionally, Curaleaf’s top-selling cannabis products include both the main Curaleaf brand and the Select brand.

Curaleaf CEO Joseph Lusardi is extremely optimistic about the company’s future prospects. According to Lusardi, “Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania, and Connecticut.” Lusardi pointed to several different types of transactions that Curaleaf expects to complete in the months ahead, including organic initiatives and integration of the Select brand into Curaleaf products.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a full-service real estate partner of large cannabis operators who need access to capital. Scythian has partnered with Curaleaf, through Grassroots Cannabis, to provide access to capital via the Scythian real estate investment fund.

For more information about how you can partner with Scythian, send an email today.


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