The international cannabis distributor Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) saw a 14 per cent YoY net revenue increase and decreased its net losses by nearly 400 per cent from the previous quarter during Q1 this year.
On Wednesday, the company announced its financial results for the quarter ending March 31. Curaleaf attributes the substantial decrease in net losses last quarter to a reduced gross margin rate stemming from price compression.
Curaleaf generated net revenue of US$336.5 million with a gross profit of US$160.8 million during the quarter. The company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 5 per cent from the previous quarter to US$73.2 million, accounting for 22 per cent of the company’s revenue.
The company had a cash position of US$115.8 million at the end of Q1, representing a 91.7 per cent decrease YoY from the US$242.6 million it had at the end of Q1, 2022. Curaleaf had US$593.8 million in outstanding debt at the end of the quarter.
Curaleaf’s retail revenue for Q1 totalled US$273 million, a 21 per cent increase YoY from the US$225.1 million generated in the first quarter of 2022. That amount represents 81 per cent of Curaleaf’s total revenue during the quarter and the company says this can be attributed to the 28 new stores Curaleaf added to its portfolio throughout last year.
Read more: Curaleaf sees 14% increase in revenue to $1.34B in 2022
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Curaleaf closed and opened operations in Q1
Operational highlights from the first quarter included closing operations in Oregon, California and Colorado as a cost saving initiative; opening three new dispensaries in Florida for a total of 58 throughout the state; starting adult use sales at two locations in Connecticut and launching the JAMS edible brand in Arizona and Florida.
Following the end of Q1 this year, Curaleaf acquired Utah’s Deseret Wellness for US$20 million, opened an additional two stores in Florida, sold 77 per cent more cannabis on April 20 than last year on the highest grossing day in New Jersey to date and launched a new mobile app and loyalty program that now has about 1.9 million members.
“We continue to optimize our United States 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,” said Curaleaf’s Executive Chairman Boris Jordan.
“We are laser focused on operating efficiencies in every aspect of our business both in the U.S. and Europe, establishing a lean asset base from which we will drive margin improvements, operating leverage and cash generation,” said Matt Darin, CEO of Curaleaf.
A report released on Friday by Fortune Business Insights indicated that the global cannabis market would be worth US$197.74 billion by 2028, having a previous value of only US$28.2 billion in 2021. Increasing consumer awareness regarding the plant and rising rates of legalization globally are key factors propelling the market’s growth.
Curaleaf’s shares rose by 4.86 per cent Thursday to $3.88 on the Canadian Securities Exchange.