During its third-quarter earnings call last week, Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) leadership dodged the fact that the business continues to burn through millions of dollars each quarter, with no apparent horizon of profitability anywhere in sight. Executives avoided discussing that year-to-date losses as of Sept. 30 topped $224 million, let alone that the company lost $377 million last year.
Instead, what Executive Chairman Boris Jordan and other members of the Curaleaf C-suite focused on during the call was persuading shareholders that layoffs, site closures, exits from various U.S. state markets, and adjustments to production levels will pay off in other markets, such as New York and Germany.
“Thinking globally and acting locally – this is the mantra we have embraced. And this is how we will win now in the long term domestically and internationally,” Jordan said during the call. “We’ve cut an enormous amount of costs. We’ve got rid of all of the businesses that were not contributing to the bottom line, and I think that we’re going to see fairly robust growth and given New York and Germany and other markets.”
Jordan emphasized the European potential, where he said reforms are poised to open up the Polish marijuana market and also expand business opportunities in the United Kingdom. He also said the company readjusted operations to better manage supply chain versus demand in its key domestic U.S. markets.
“I’m confident that our current 17-state exposure gives us the right domestic footprint and a presence in key markets that we expect will drive outsized growth over the next several years. We are now positioned to achieve our profit goals, and I do not proceed any further state exits,” Jordan said.
CEO Matt Darin also shared that by the end of this year, the company plans to enter the New York wholesale market yet this year and open its first recreational store in the state.
And Jordan also said the recent Ohio vote to legalize recreational cannabis puts wind in the sails of not just that state’s market – again, where Curaleaf already has a footprint – but also in the broader political momentum for federal reform.
“I continue to be a strong believer that we’re going to get rescheduling sooner rather than later. There’s all sorts of incentives and reasons why the Biden administration wants to do this,” Jordan said, referring to the yet-to-be-finalized move to reclassify marijuana to Schedule III from Schedule I on the list of federally controlled substances.
Jordan also predicted that Ohio Republicans wouldn’t try to stand in the way of a recreational cannabis market rollout, a move that is theoretically within their power. He said such a move would be political “suicide” for Republicans.
All the right-sizing of Curaleaf’s operations, its acquisitions, and its positioning for the opening of new markets adds up to one thing, Jordan asserted: The multistate operator is ready to “achieve our stated goal of establishing Curaleaf as the world’s leading cannabis company.”