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Curaleaf Reports Record Earnings, Boosted By Grassroots Acquisition

March 16, 2021

Wakefield, Massachusetts-based Curaleaf Holdings reported $233.3 million in managed revenue for the final quarter of 2020, up 186% from the same period in 2019. The quarter pushed Curaleaf’s full-year 2020 managed revenue to $653 million, up 161% from 2019’s total of $250.6 million. On an adjusted EBITDA basis, Curaleaf logged a positive $53.8 million for the quarter ended December 31 and $144.1 million for the year.

“Curaleaf’s record fourth quarter results reflected the benefit of our acquisition of Grassroots, which expanded our presence into six new states, including high-growth markets such as Illinois and Pennsylvania, as well as the continued ramp up of our Select brand, which is now in 17 states,” said Curaleaf CEO Joe Bayern. “In 2021, we expect to see the positive benefits of the transformative legalization of adult-use cannabis in Arizona and New Jersey.”

Breaking it down, Curaleaf’s retail revenue grew to $164.9 million in the fourth quarter, up from $48.2 million in the last quarter of 2019. The gains were driven by organic growth and new store openings in Florida, Massachusetts, Arizona, Illinois, and New York. Wholesale revenue reached $64.4 million in the quarter. The same trends were echoed throughout its annual results: retail revenue reached $423.2 million for the year, up over 200% from $138.7 million in 2019. And wholesale revenue totaled $163 million for the year, driven by Curaleaf’s eight acquisitions of Select, Grassroots, Curaleaf NJ, Arrow, MEOT, Remedy, Blue Kudu, and ATG.

Separately, the company announced its entry to the European cannabis market through yet another acquisition. Curaleaf has signed a definitive agreement to buy Emmac Life Sciences Limited for approximately $286 million, 15% of which will be paid in cash and the rest in stock. The announcement touts Emmac as the largest vertically integrated independent cannabis company in Europe, with cultivation, processing, distribution, and R&D operations across the U.K., Germany, Italy, Spain, and Portugal.

“Curaleaf’s acquisition of Emmac provides an advanced base to reach scale within the nascent European cannabis market and transform Curaleaf into a truly international cannabis consumer packaged goods company,” said Boris Jordan, Curaleaf’s executive chairman. “The consumer and political liberalization trends around cannabis that are sweeping the U.S. are also increasingly taking hold in Europe.”

Jordan expects U.S. cannabis players to be able to uplist their shares to major stock exchanges this year, according to a recent interview with Bloomberg. The change, which would open a floodgate of capital to the sector, hinges on cannabis banking reform, in his opinion. A federal bill opening cannabis businesses to traditional banking infrastructure would also include provisions protecting stock exchanges for listing cannabis stocks. Confidence is high that, short of federal legalization, banking reform will be enacted this year.—Danny Sullivan

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