Curaleaf Q3 Revenue Up But Net Profit Down

Curaleaf Holdings, Inc. (CURLF),  a constituent in the munKNEE Pure-Play Pot Stock Index, announced its Q3, 2020 financial and operating results on Tuesday for the period ended September 30, 2020, as follows:

Q3 Financial Highlights 

(All results are presented in USD and compared to the previous quarter.)

• Managed Revenue: increased 59% to $193.2M 
• Gross Profit (Loss) on Cannabis Sales: increased 110% to $89.7M 
• Gross Margin: increased to 50% from 43%
• Net Profit (Loss): increased by 360.5% to $(9.3)M 
• Net Profit (Loss) per Share: decreased to $(0.01) from $(0.00)
• Adj. EBITDA: increased 51% to $42.3M
• Cash Equiv. on Hand: decreased 44% to $3.0M 

Q3 Operational Highlights

• Closed acquisition of Grassroots creating the world's largest cannabis Company, as measured by revenue.
• Completed acquisition of Curaleaf NJ, Inc. and Maine Organic Therapy assets that were previously managed.
• Closed private placement of approximately $24.5 million in net proceeds.
• Raised approximately $41.0 million in net proceeds related to sale-leaseback transactions.

Management Commentary

Joseph Lusardi, Chief Executive Officer, stated:

• "...As we head into 2021, 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. Each of these markets present an enormous opportunity for us, as the only MSO with a leading presence in every one of these states.
• Looking forward, we expect our growth will be driven by:
  • organic initiatives,
  • increased capacity,
  • dispensaries in key states and
  • the roll out of adult use in Arizona and New Jersey."

Mike Carlotti, Chief Financial Officer, added:

• "...We anticipate a continued rise in managed revenue and adjusted EBITDA leading to strong sequential growth in the fourth quarter and into 2021.
• ...We consolidated our final managed entity, Alternative Therapies Group in Massachusetts in early October and, accordingly, will report only IFRS total revenue beginning in the first quarter of 2021, thus greatly simplifying our future financial reporting."

Stock Performance

The Curaleaf stock price is UP 71.1% YTD and continues to appreciate UP 48.6% since the end of September and UP 15.1% so far in November as illustrated in the chart below:

(Click on image to enlarge)