Curaleaf Holdings Inc.’s stronger-than-expected first-quarter earnings have put the company on track to deliver above-consensus numbers for 2021 and beat its own guidance for full-year revenue of $1.2 billion to $1.3 billion, analysts said Tuesday.
Curaleaf Holdings said Tuesday it signed a $286 million definitive agreement to acquire London-based medical marijuana company Emmac Life Sciences, giving the Massachusetts-based multistate operator a major foothold in the European cannabis market and a leg up on rival businesses.
The terms of the deal call for Curaleaf to pay $286 million up front, with 85% in Curaleaf stock and 15% in cash.
The transaction includes another $57 million dependent on achieving certain performance targets, meaning the deal ultimately could total up to $343 million.
Four publicly traded MSOs are particularly primed to benefit from new and potential adult-use markets in Arizona, New Jersey and Pennsylvania, according to an industry update by Canadian-based investment banking firm Canaccord Genuity.
Voters in Arizona and New Jersey legalized potentially huge adult-use marijuana markets on Election Day while Pennsylvania and New York are strong possibilities to follow suit because of their proximity to New Jersey.
The four MSOs identified by Canaccord Genuity are:
Vermont’s new recreational cannabis program is projected to generate roughly $250 million in annual sales by the middle of the decade, but homegrown companies might find themselves pitted against larger out-of-state businesses.
Three medical cannabis businesses – including multistate operators Curaleaf and iAnthus Capital Holdings – are poised to take advantage of a five-month head start in sales in the spring of 2022 backed by potentially large cultivation and processing facilities.
Small producers and retailers will follow.
Massachusetts-based Curaleaf has become one of the largest multistate cannabis operators in the United States by adopting a broad-market approach – with scores of cultivation, processing and dispensary facilities now stretching across 23 states.
The diversified approach comes at a time when other multistate operators have retrenched and refocused operations, in part to conserve cash after investors grew hesitant to wager on cannabis and capital became tight.
Multi-state operator Curaleaf Holdings (OTC:CURL.F) is so bullish on its future that it expects to reach $1 billion in sales as early as next year. Let's take a closer look at where the company is today and if it's poised to be the first cannabis company to hit that mark.
Reaching $1 billion in sales isn't unrealistic for Curaleaf
Despite a lot of fears, Curaleaf (OTCPK:CURLF) has generally done what the Canadian cannabis giants couldn't do. The U.S. multi-state operator (MSO) has turned acquisitions into a market-leading position and a large EBITDA profit while the others have faltered. My bullish investment thesis remains intact as the MSO is poised to become the first cannabis company to top $200 million in quarterly sales with plenty of runway ahead.
Grassroots Key
Green Thumb is a rising star
Illinois-based Green Thumb Industries owns two retail cannabis stores, Rise and Essence. The company manufactures and distributes a variety of popular medical and recreational cannabis products through these storefronts under brand names like Dogwalkers, Dr. Solomon's, and Rythm.
Financial analysis firm Cantor Fitzgerald released a report on Wednesday which estimates that Arizona, New Jersey, New York, Pennsylvania and Connecticut will legalize recreational cannabis sales in the next two years.
Analyst Pablo Zuanic calculates that these new states will add $3.5 billion in market potential for cannabis MSOs and other smaller players.