Curaleaf Exiting California, Colorado, and Oregon
January 31, 2023New York-based multi-state operator Curaleaf is pulling out of three states in an effort to streamline its business. The company announced it is closing the majority of its operations in California, Colorado, and Oregon beginning this month. It will also consolidate its cultivation and processing in Massachusetts to a single facility, closing another. Winding down these parts of the business will result in non-cash restructuring and impairment charges that will be detailed on its fourth quarter earnings call in March.
Concurrent with these closures, Curaleaf is reducing its payroll by 10% and cutting its workforce by 4%. Coupled with other cost-saving initiatives, the company expects to realize $60 million in gross-run rate expense savings in 2023.
Curaleaf said the difficult operating environment across California, Colorado, and Oregon made the exit necessary. “These adjustments were necessary for the future success and profitability of the business and were made as a result of recent legislative decisions, price compression, and lack of enforcement of the illicit market. For context, these markets contributed less than $50 million in revenue to Curaleaf last year.”
“Today’s announcement reflects a decision that we did not arrive at lightly, and one that makes sense for our business at this time,” said CEO Matt Darin. “We have a fiduciary responsibility to our shareholders to improve margins and fortify our balance sheet by controlling what we can in our business. We believe these states will represent opportunities in the future, but the current price compression caused by a lack of meaningful enforcement of the illicit market prevent us from generating an acceptable return on our investments. We remain excited about our future growth prospects both domestically and internationally, and now can devote greater resources to tangible growth opportunities in emerging markets such as Europe.”—Danny Sullivan
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