CURLF reported 1Q23 results
Curaleaf (CURLF) is a Hedgeye Cannabis Best Idea Short.
The company reported 1Q23 results and revenue for the quarter came in at $336.5M, which represents a 14% YoY increase but a decline of 2% sequentially. Retail revenue contributed $273M in revenue, which was up 21% YoY, while wholesale revenue decreased 11% YoY. Gross profits were $160.8M with 48% gross margins. Adj EBITDA was $73.2M (or 22% of revenues), with $115.8M of cash on hand at the end of the quarter. Curaleaf reported net losses for the quarter of $54.4M. They officially closed all operations in California, Colorado, and Oregon. They expanded their adult-use presence in Florida and Connecticut but also reduced their footprint in Massachusetts, Utah, and New Jersey. The company now has 152 dispensaries nationwide.
Executive Chairman Boris Jordan said, "2023 is off to a strong start for Curaleaf, with first quarter year-over-year revenue growing 14% to $336.5 million, beating our guidance of low double-digit growth. The adjusted gross margin was 48%, and the adjusted EBITDA margin was 22%. We ended the quarter with $116 million of cash on our balance sheet and generated $31 million in operating cash flow from continuing operations. We continue to optimize our U.S. assets for responsible growth and are very excited about the investments we are making internationally, setting the stage for robust growth in '24, '25, and '26 as cannabis adoption accelerates across Europe. We've entered 2023 from a position of strength with ample cash on hand and will be investing in our business, setting us up for years of market share expansion."
Curalead signed an executive deal with a Canadian LP to provide Curaleaf with 50% of their cultivation for the next 12 to 24 months. This deal is designed to support Curaleaf's growth efforts in Germany and Portugal until the company can efficiently support its own cultivation in these regions. As you can see, Curaleaf is throwing everything they have at the wall hoping something will stick. There is a serious lack of focus and no desire to be great in any specific area.
Cannabis Speaker Call W/ Mike Gorenstein
Cronos Group (CRON) is a Hedgeye Cannabis Best Idea Long.
EVENT DETAILS:
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Topics to be discussed & THE PATH FORWARD:
- Discussing Cronos's 1Q23 results and guidance.
- How Cronos is focused on cost reductions and cash flow positive in 2024.
- New products and market share trends in Canada.
- We believe that the US Cannabis market is broken and that Cronos is perfectly positioned to take advantage of legalization.
- Discussion around the cost of cultivation in different geographies (USA, CAN & ISR)
- How rare cannabinoids drive Cronos’s borderless branded strategy
- Discuss sum of parts
About Mike Gorenstein (CEO):
Oregon Cannabis Trends
In the month of April, Oregon recorded ~$79M in cannabis sales, which represents a sequential decline of 2.7% and a YoY decline of 11.6%. Unit volumes in the month were up 3.4% sequentially but down 7.4% YoY. The average price per unit was down 5.9% sequentially and down 4.5% YoY.
