Curaleaf Reports Q1 2022 Results, Revenue Decreases 2% Sequentially To $313M

Curaleaf Holdings, Inc. CURA CURLF reported its financial and operating results late Monday for the first quarter ended March 31, 2022.

First Quarter 2022 Financial Highlights

• Revenue of $313 million, up 20% YoY. 
• Adjusted EBITDA of $73 million, up 16% YoY. 
• Cash Flow from operations of $57.4 million or 18% of revenue. 
• Retail revenue increased by 21% to $226 million during the first quarter of 2022, compared to $188 million in the first quarter of 2021, representing 72% of total revenue.
• Wholesale revenue increased 19% to $86 million during the first quarter of 2022, compared to $72 million in the first quarter of 2021, representing 27% of total revenue.
• Gross profit on cannabis sales was $154 million for the first quarter of 2022, compared to $128 million in the first quarter of 2021.
• Net loss was $20 million, compared to a net loss of $15 million in the first quarter of 2021.
• Adjusted EBITDA was $73 million for the first quarter of 2022, compared to $63 million for the first quarter of 2021.

“The Company's year-over-year revenue growth primarily reflects continued organic growth driven by new retail store openings, the addition of new wholesale partner accounts, product launches, and the expansion of cultivation and production facilities,” stated the company in a press release.

“The year-over-year increase in adjusted EBITDA was primarily driven by solid revenue growth combined with operating leverage. The year-over-year decrease in Adjusted EBITDA margin reflects greater SG&A expenditures due to increased headcount in support of new store openings, higher levels of expenses related to research and development activities, and marketing in support of new product rollouts.”

Comments From Management

"Our national footprint has always been a key advantage of our growth strategy, and despite a tough macro environment during the first quarter, Curaleaf continued to grow share in several important markets. We saw strong month-over-month growth beginning in March and heading into the second quarter, boosting confidence in our ability to hit full-year revenue guidance of $1.4 billion - $1.5 billion,” said Boris Jordan, executive chairman of Curaleaf. “Given renewed optimism surrounding federal banking reform, a record-breaking 4/20, the exciting launch last month of New Jersey adult-use sales, and the prospect of New York following suit, 2022 is shaping up to be another milestone year."

CEO comments:

"Our continued focus on research & development of innovative new products, commercialization, national distribution, and brand building were cornerstones of the first quarter. From the launch of our proprietary ACE extraction system in Florida - which produces the purest live rosin product in the market - to new products launched in the last 12 months generating 17% of our revenues,” added Joe Bayern, CEO of Curaleaf. “This advantage will help Curaleaf continue to expand Adjusted EBITDA margins."

First Quarter Operating Highlights

• Added 11 new retail dispensaries, closing the quarter with 128 total locations, and serviced over 2,200 wholesale partner accounts.
• Completed the acquisition of Bloom Dispensaries, a vertically integrated, single state cannabis operator in Arizona, which added four retail dispensaries and two adjacent cultivation and processing facilities totaling approximately 63,500 sq. ft.
• Launched a solventless Select Live Rosin product in Florida featuring an aromatic, pure cannabis flavor created through the Company's live harvesting, flash-freezing, and proprietary extraction process.

Balance Sheet and Cash Flow

As of March 31, 2022, the Company had $243 million of cash and $584 million of outstanding debt net of unamortized debt discounts. During the first quarter of 2022, Curaleaf invested $30 million net in capital expenditures mostly attributable to cultivation, processing, and retail site development activities.

Image By Ilona Szentivanyi.