American cannabis operator Curaleaf Holdings, Inc. (CSE: CURA) reported record fourth-quarter revenue while also starting a hiring spree due to increased demand amid the COVID-19 crisis.
The Massachusetts-based pot giant released its financial results Tuesday for the fourth quarter and full year ended Dec. 31, reporting record total revenue of US$75.5 million, and US$221 million, respectively.
Fourth quarter revenue grew 22 per cent from the previous three-month period, which helped the company post a record adjusted EBITDA of US$13.8 million, which rose 32 per cent sequentially, Curaleaf said.
In the 2019 fiscal year, the company said it acquired nine other businesses, including a well-known cannabis vape and concentrates brand called Select.
The merger deals gave Curaleaf an additional 11 dispensaries, 5 cultivation sites and 14 processing sites, it said.
“In fiscal 2019, the Curaleaf team delivered record results with our organic business growth and recent strategic acquisitions, solidifying our position as the leading cannabis operator in the United States,” CEO Joseph Lusardi said in a statement.
“The fourth quarter represented our third consecutive quarter of positive Adjusted EBITDA, driven by additional production and retail locations coming online in key states as well as the positive impact of our increasing economies of scale.”
Curaleaf stock rose 25 per cent Tuesday on the Canadian Securities Exchange.
“2019 was a banner year for Curaleaf. We announced two transformative transactions in Select and Grassroots. We acquired additional operating assets and licenses that more than doubled our footprint and grew our customer base by 366%.” – #Curaleaf CEO Joe Lusardi$CURA $CURLF pic.twitter.com/CFVDTBMrvV
— Curaleaf (@Curaleaf_Inc) March 24, 2020
Curaleaf, however, posted a Q4 net loss of US$27.2 million, up 65 per cent from the fourth quarter of 2018.
The company said the increase was mainly due to a US$10.1 million increase in income tax and non-cash items such as an US$8.9 million rise in depreciation and amortization, as well as a US$4.6 million increase in share-based compensation.
Curaleaf remains open in key states amid COVID-19 pandemic
The company also said Tuesday it received essential service designation in key U.S. markets where it has medical dispensaries.
Curaleaf said its stores in Arizona, Florida, Maine Maryland, New Jersey, New York and Oregon will remain open. However, only medical dispensaries will stay operating in Massachusetts, and stores will close in Nevada but offer home delivery.
While cannabis operators in the U.S. and Canada have announced temporary layoffs, Curaleaf says it will be hiring across its retail, cultivation and processing facilities.
The company said it’s hiring extra staff due to increased demand of its patients and recreational customers.
To accommodate higher volumes while keeping consumers safe, Curaleaf said it’s adjusted store hours and prioritizes vulnerable customers, including times dedicated for senior shopping.
The company is also enforcing social distancing, upping hygiene measures and using technology to minimize contact by working to employ curbside delivery, mobile pre-ordering, express pickup and a wait list ordering app.
“The COVID-19 situation is evolving rapidly and we are responding as quickly as possible to ensure we can continue to meet the needs of our customers,” Lusardi said in a separate release.
“We have never been more committed to providing our vital services and products and will continue to do everything we can to fulfill that mission while protecting the well-being of our dedicated employees. In these difficult times, we will be hiring employees and working with local organizations to provide job opportunities to those who are out of work.”
Curaleaf says it’s the largest cannabis retailer in the U.S. with 54 stores across the country, and will own a total of 74 after all of its pending acquisitions close.
On a busy Tuesday, Curaleaf also said it will acquire three additional Arrow Alternative Care dispensaries located in metro areas of Connecticut.
To fund further expansion, the company said in its earnings report it had closed a US$300 million senior secured term loan after the fourth quarter.
As of Dec. 31, Curaleaf had US$42.3 million cash on hand, and US$105 million of outstanding debt.
Top image via Curaleaf