Mixed Results For Leading Cannabis Companies, As Long-Term Outlook Remains Cloudy
November 12, 2024The past three months have shown a mixed bag in terms of results for leading U.S. cannabis operators, as multistate players continue to navigate market uncertainties. Last week, Curaleaf, Verano, the Cannabist Company, Green Thumb Industries, and Cresco Labs reported Q3 2024 earnings, with most showing revenue declines. In addition to the challenges shown in these companies’ earnings reports, the industry is facing considerable uncertainty following the U.S. election, with federal legalization seen as less likely under GOP rule.
Curaleaf reported net revenue of $330 million for the three months through September, a 1% decline over Q3 2023 and a 3% dip compared to Q2 2024. Adjusted EBITDA was at $75.3 million, an improvement of 23 basis points year-over-year. The nine-month picture is brighter, with Curaleaf’s year-to-date revenue at over $1 billion, a 1% increase over last year. During the third quarter, the company continued to expand, adding two new dispensaries in Rochester and Syracuse, New York, as well as entering the Ohio market with two dispensaries and adding two more in Florida, bringing the company to 150 in all.
“The industry has experienced the pressures of regulatory overhang, increased competition, unprecedented weather conditions, and irrational pricing strategies,” said CEO and chairman Boris Jordan. “This backdrop is one of the key drivers behind our shift towards focusing on sustainable, profitable organic growth by maintaining share in challenged markets and growing share where we see strategic opportunity.”
Chicago’s Green Thumb Industries bucked the trend and posted revenue of $287 million, a 4% jump over last year. The company is also expanding during this challenging period for the overall industry. In Q3, Green Thumb added three Rise dispensaries in Florida and one in New York. The company attributed its sales increase to Rise dispensaries seeing strong sales, as well as particular successes in New York and Ohio. While overall revenue was up 4%, retail revenue gains were smaller at 0.4%. “In addition to launching legal sales in Ohio in early August and opening four new Rise dispensaries, we continued to make meaningful market share gains across our consumer packaged goods brand portfolio in a number of states,” said president Anthony Georgiadis.
Fellow Illinois group Cresco Labs saw net revenue decline 5.7% to $180 million. Adjusted EBITDA was up 5% to $51 million and, despite the revenue losses, the company maintained its leading market share in Illinois, Pennsylvania, and Massachusetts while building to be the third-largest player in Ohio’s new adult-use market. “So far this year, we’ve generated $103 million in operating cashflow, enabling us to reinvest in our core, and to explore new markets and growth verticals, all while improving our balance sheet and paying down debt,” said Charlie Bachtell, co-founder and CEO.
For Verano, Q3 2024 saw revenues sink 2.6% to $217 million sequentially and 9.7% year-over-year. Adjusted EBITDA was at $65.5 million compared to $89 million in Q3 2023. Net loss was up, reaching just under $43 million, compared to $18 million a year ago. “With rescheduling proceedings set to commence in December, and additional dispensary openings planned across multiple markets, we are prepared to leverage potential catalysts in the months and years ahead at the state and federal levels,” said George Archos, Verano’s founder, chairman, and CEO.
Finally, the Cannabist Company reported an 8% decline in revenue to $115 million. The company attributes the losses to the sale of businesses in Virginia and Arizona, noting that minus the divested assets, performance would have been flat quarter-over-quarter. Cannabist added that it’s pleased with its debut in Ohio’s adult-use market and is planning new dispensaries New Jersey, Virginia, and three in Ohio. Colorado, Maryland, New Jersey, Ohio, and Virginia are the multistate operator’s leading markets. “Our optimization work is not yet done. Moving ahead into the fourth quarter and next year, we are continuing on our path to enhanced profitability,” said David Hart, CEO. “We have exciting growth catalysts in 2025, including adult-use in Delaware and additional retail locations in top markets such as New Jersey, Virginia, and Ohio.”—Shane English
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