Curaleaf Archives - Green Market Report

Debra BorchardtDebra BorchardtJanuary 15, 2020
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3min1620

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) said that it has upsized and closed a Senior Secured Term Loan Facility from a syndicate of lenders totaling $300 million. The notes for Curaleaf will bear interest at a rate of 13.0% per annum, payable quarterly in arrears, with a maturity 48 months from closing.

The company said that the proceeds will be used to refinance existing debt, satisfy transaction fees and expenses from previously announced acquisitions, fund capital expenditures and for general corporate purposes. The sole placement agent for the Facility is Seaport Global Securities LLC.

“We are pleased with the upsizing and closing of the deal at what we believe to be attractive terms,” said Joseph Lusardi, Chief Executive Officer of Curaleaf. “Most importantly we strengthened our balance sheet without diluting our existing shareholders. With the completion of this transaction, we have ample liquidity to execute on our strategy and are well-positioned to take advantage of the significant market opportunities that exist in this space.”

In October, Curaleaf amended its deal with Select. At the time Lusardi said, “We remain extremely confident in the strength and operations of the Select business and of the long-term prospects of the cannabis sector as a whole. We look forward to bringing our companies together to lead this industry as it continues to mature and grow. Expiration of the HSR waiting period was a key milestone in closing this transaction and we continue to work with state regulators to receive the necessary approvals with a target closing date of January 1, 2020.”

Utah

Earlier this week, Curaleaf said that it had received an important new permit in the state of Utah. The company announced in a press release Tuesday that it has won preliminary approval for a processing license there.

“We are pleased with the progress we are making in the state of Utah. Aligned with our strategy, this processing license puts us closer to achieving vertical integration in the state, which gives us greater control of production while lowering costs for patients,” said Lusardi. “We look forward to providing the people of Utah with increased access to high quality and reliable cannabis products.”

While pending final approval, the new license will allow the company to complete a Utah processing facility right away.

 


Debra BorchardtDebra BorchardtDecember 19, 2019
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15min4640

The Green Market Report sat down with Curaleaf’s CEO Joe Lusardi at last week’s MJ Biz conference in Las Vegas NV. This interview has been edited for grammatical purposes.

Debra Borchardt:             The Select deal – you brought those numbers I guess to a new reality. Where are you now with that transaction? Because you’ve pretty drastically changed the valuation on that.

Joe Lusardi:                         I’m not sure I’d characterize it that way. What I would say is that we reduced the base consideration. The transaction, if they do what we think they’re going to do, will be 90 million shares. So it’s just, we restructured it to de-risk it and make some of the consideration an earnout. And we thought that that was the prudent thing to do given what was going on in the vape environment.

Now you’re maybe aware that the Massachusetts vape ban lifted today. The CDC is saying that we’ve already reached the peak of people showing up with lung disease. And that started the decline, which all points to the fact that the problem is largely from the black market. So we’re actually pretty confident in that category overall, and that consumers are going to come back to that form factor, and we feel pretty good about the transaction, to be honest. And I think it’s also important to know that the Select brand is not just the vape brand, it’s a family of products. So you’re going to be seeing a number of new products from Select over the coming months. One is a gummy that’s now available in a couple of markets. You’re going to see a spray, a tincture, and a couple of other novel form factors in the Select brand. So we feel good about the transaction.

Debra Borchardt:             Were you surprised at all with any of the Select sales numbers when you really started to peel back some of the layers on Select? Because I had heard a lot of rumors out in the market about Select before you guys got interested in them.

Joe Lusardi:                         There’s no manipulation of the numbers. I mean we did a pretty thorough diligence of the business. What I would say is that they clearly felt the impact of the vape crisis. We did a thorough vetting of the transaction before we did the deal. We’re very optimistic. Again, I said that consumers are becoming more aware that they should buy regulated products. Select’s whole brand ethos is about safety and quality, and I think you’ll continue to see that as they pioneer new hardware and new products. So I think we felt very good with the transaction. We’re trying to close it on January 2nd. We’re working with regulators right now. We’ve cleared the DOJ HSR review, which is a pretty big event. So everything looks to be on track for early January close.

Debra Borchardt:             You just put in a new executive, Joe Bayern, a president that was from INDUS Holdings, but he seemed like he had mostly a CPG background. We’re seeing a lot of that within the cannabis industry, this whole hiring of CPG executives. What is the thought process for you guys behind that?

Joe Lusardi:                         I would characterize Curaleaf as an early-stage consumer product company. And I think people that come out of that industry, that have a depth of knowledge and building brands, building infrastructure and taking companies from small to bigger is highly relevant for where we are in our growth curve. So I’m ecstatic that he joined the team. He’s a bit of a unicorn in that he also had cannabis experience. But that’s not why we hired him. We hired him for his experience before cannabis.

It’s helpful that he’s been in the industry for 11 months and we don’t have to explain Cannabis 101. But we hired him because he has worked on some very significant transformations of businesses, including Cadbury, Dr. Pepper, Snapple, he was on the senior team that built VOSS Water, which is now a premier global water brand. So he’s a very capable executive, has skills that I certainly don’t have. And it’s going to be a huge addition to the team.

Debra Borchardt:             So you just mentioned that Select has got new products coming out. What’s really your strategy then for 2020?

Joe Lusardi:                         The marketing people would kill me if I say too much more. But what I’ll tell you, we really think that consumers are coming to cannabis and they’re looking for a variety of form factors. So you know, flower already represents less than half the sales and in most states, vapes are coming out strong and the edible category continues to grow. And so I think that’s where you’re going to see a lot of development in 2020, particularly for brands like Select. And I think that those products are really exciting because they’re consumer packaged goods, right? And so they lend themselves to marketing, form factors, predictability, consistency, and really brand building. So that’s why we’re really excited about what we have ahead of us.

What makes Curaleaf unique is that when we close Grassroots in the spring, we will have a platform unlike any other cannabis company really in the world. And what’s really exciting is we’re going to take the number one brand from the West Coast and move it all across the United States. So Select will be the number one brand in most major markets in the country for 2020, and no one else is going to do that.

Debra Borchardt:             When you look at Illinois and Michigan, everybody’s saying Michigan is going to be the next big market. Oh no, it’s Illinois. Which is it?

Joe Lusardi:                         It’s Illinois.

Debra Borchardt:             Illinois?

Joe Lusardi:                         That’s not debatable, it’s 13 million people in 55 stores. The numbers stack up really well. It’s just math, I’m not a genius.

Debra Borchardt:             But I’m sure you’ve heard people say the same thing like, “Oh, Michigan is going to be the big one.”

Joe Lusardi:                         Look, I think Michigan is a really interesting market. It has a very prolific caregiver market that has a huge amount of patients in the state. It’s really, really going to come down to how the market structurally changes, because you have a lot of what I would say, activity, that hasn’t always necessarily fit within the framework or the regulations. There’s been a lot of caregivers and a lot of dispensaries that are operated that were not fully licensed by the state. And so if they can corral all that activity and really push it out through the regulated channel, unlike California, then Michigan has a chance to be a very big market, a regulated market. There’s no denying that both Michigan and California are big cannabis markets, that’s for sure undeniable, but can they be good regulated markets? We’ll see. California clearly is struggling with that concept.

Debra Borchardt:             And Massachusetts recently started their adult-use sales. Everybody was saying, “Oh, all the New Yorkers are going to go across the state lines, and that really doesn’t seem to be happening. I think a lot of people thought that Massachusetts was going to be the domino that was going to tip a lot of the other Northeastern states. And that doesn’t really seem to have happened.

Joe Lusardi:                         Massachusetts. My home state has clearly not lived up to expectations in 2019. I would say that that was largely driven by factors out of the operator’s control. It was really driven by how the government rolled out the program. I think that only now the state has 30 stores open. So this…

Debra Borchardt:             And they’re disappointing. I’ve been in a couple of them and I’m like, “You got to be kidding me.” But I’m used to going to California dispensaries, and such.

Joe Lusardi:                         I mean California has had a 20 years quasi-legal marijuana market. So you’re not going to get there tomorrow. But it’s also true that because Massachusetts has been, I’ll say deliberately in rolling out the program, it’s supply constraint. So you don’t have a diversity of manufacturers. You don’t have a diversity of growers. You don’t have a diversity of stores, there isn’t a really prolific wholesale market.

It’s a very challenging operating environment right now. The early numbers are promising. I think 2020 will be a big year for Massachusetts. It will be a big leap forward. We just opened our first adult-use store in November. We’re going to open up two more, one in Provincetown, we think in early 2020 and then another in the state. So it’s going to be a good year for Curaleaf and I think that as more operators get open, the market will develop, there’ll be more specialization in manufacturing. There’ll be more products, and the shelves will fill up, and it’ll be a more wholesome retail experience, but it’s unreasonable to expect it will be like California. It’s just, we don’t have that history. Right? The East Coast has been very deliberately rolled out with a limited number of players, very capital intensive.

Debra Borchardt:             Very, very conservative.

Joe Lusardi:                         So it’s going to take time. But I mean anecdotally, if you go to the stores out in the Berkshires and you’d go in the parking lot, there’s a lot of New York license plates in those parking lots. And what I would also say is that I do think it will be a catalyst in 2020 because it’s putting a lot of pressure already on Connecticut. If it had rolled out the program faster, the pressure would have been greater. But Connecticut clearly needs to address a massive budget shortfall and I think they’re going to look to cannabis as one avenue.

Maine is going to go adult use this spring. Governor Mills has been fantastic and is really driving the program. So you’ll have two Northeast states, Connecticut is under a lot of pressure. New York, the dialogue is going to be very active in January through March, I mean the Lieutenant Governor came out today and said that it’s long overdue. So that’s interesting. And Governor Murphy in New Jersey said he’s going to take another crack at it, so it’s going to happen. Governor Wolf in Pennsylvania supports it. Progress is not linear or sometimes quick, but I genuinely feel like maybe the dominoes are falling, not as fast as people hope, but they’re going to fall.

Debra Borchardt:             So it sounds like you’ll be ready to put a close to 2019. 2020 looks a lot more promising.

Joe Lusardi:                         I have to say for Curaleaf, despite the pain in the equity markets, this is a fantastic year for our business. We had a major inflection point in Q3 we showed 30% top-line growth for the second quarter in a row, we’re adjusted EDITDA positive two quarters in a row. We’re opening stores, we’re executing on our business. We’re turning all of the investment we’ve made into cash-generating assets. So this is the best year in our company history. I mean, it was really a great year, operationally. 2020 sets up to be even better.


Debra BorchardtDebra BorchardtOctober 30, 2019
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3min5170

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) is changing the terms of its prior agreement to acquire Select’s state-regulated cannabis business.

Back in May, Curaleaf said it was going to acquire Select’s business including Select’s manufacturing, processing, distribution, marketing and retailing operations and all adult-use and medical cannabis products marketed under the Select brand name, including all intellectual property.

The company said in a statement, “Due to changes in market conditions since the original merger agreement was signed in May, Curaleaf and Select have mutually agreed to reduce the base consideration payable upon close under the Proposed Transaction.”

Curaleaf announced, “The number of subordinate voting shares of Curaleaf payable at closing of the Proposed Transaction has been reduced to 55 million shares of Curaleaf from 95 million originally. The remaining 40 million voting shares will now be payable to Select equity holders contingent upon Curaleaf achieving certain calendar year 2020 revenue targets based on Select-branded retail extract sales beginning at a target of $130 million with maximum achievement at $250 million.”

The company went on to say, “In addition, Select equity holders will also be eligible to receive an earn-out of up to $200 million from the issuance of additional SVS, contingent upon Curaleaf exceeding $300 million in calendar year 2020 revenue for Select-branded retail extract sales.”

“The amended terms of the acquisition that we have agreed to with Select reflect our commitment to executing a prudent investment strategy that is in the best interests of our shareholders. We remain extremely confident in the strength and operations of the Select business and of the long-term prospects of the cannabis sector as a whole. We look forward to bringing our companies together to lead this industry as it continues to mature and grow,” said Curaleaf CEO Joseph Lusardi. “Expiration of the HSR waiting period was a key milestone in closing this transaction and we continue to work with state regulators to receive the necessary approvals with a target closing date of January 1, 2020.”

Additionally, Curaleaf also announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976  has expired with respect to the acquisition of Select by Curaleaf.

 


William SumnerWilliam SumnerJuly 17, 2019
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8min5680

It’s time for your Daily Hit of cannabis financial news for July 17, 2019.

On the Site

Supreme Cannabis

The Supreme Cannabis Company, Inc. (TSX: FIRE) (OTCQX: SPRWF) (FRA: 53S1) plans to acquire all of the shares of privately-held Toronto-based Truverra Inc. in a deal valued at $20 million. Truverra is known for its wholly-owned subsidiaries, Canadian Clinical Cannabinoids Inc. (CCC) and Truverra (Europe) B.V. The move is intended to boost Supreme’s extract offering for later this year when Canada’s market will open up to such products.

SOL Global

SOL Global Investments Corp. (CSE:SOL) (OTCPK:SOLCF) has invested $6.5 million in its portfolio company CannCure Investments Inc. The move is intended to fuel the growth of its position throughout the cannabis markets of Florida, Michigan, and California… CannCure is a majority-owned subsidiary of SOL Global that indirectly holds 100% of 3 Boys Farms,  a Florida cannabis company with a state license to cultivate, process and dispense medical marijuana and other diversified cannabis assets in various stages of investment.

Curaleaf

Curaleaf Holdings Inc. (NURLF) stock popped almost 20% on the news it was acquiring privately-held multi-state operator Grassroots or GR Companies Inc. in a deal valued at $875 million. The deal will be made up of 108.8 million shares and $75 million at the closing which is expected in early 2020. If the deal is completed, Curaleaf’s footprint grows from 12 states to 19 states and putting it within reach of Acreage Holding’s (ACRG.U) size.

In Other News

Plus Products

Plus Products Inc. (CSE: PLUS) (OTCQB: PLPRF) announced revealed the rebranding of its line of low-dose cannabis edibles. Guiding the rebrand was research conducted by Henry J. Rak Associates and designed by Partners & Spade. “Cannabis can be confusing. We hope our new system will help reduce some of that confusion,” said Jake Heimark, Plus Products CEO and Co-founder. “We worked with experienced market researchers to find out why people use cannabis, then translated those findings into an easy-to-use system of cannabis. We are excited to help our customers Uplift their experiences, bring Balance to their everyday, and Unwind without getting unwound.”

PHILTER Labs

The technology company PHILTER Labs, Inc. announced that it has raised $3 million in growth funding. The company specializes in crafting vaporizer products and accessories. Leading the fundraise was Bravos Capital, Explorer Equity, and an undisclosed cannabis-focused private equity firm. “The proprietary technology behind PHILTER made it a very attractive investment opportunity for us; the company’s future product roadmap clearly represents a revolutionary step forward in vape filtration technology, as opposed to the more incremental steps that most vape hardware companies are working on,” said Jeff Kendig, Managing Partner of Bravos Capital.


Debra BorchardtDebra BorchardtJuly 17, 2019
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5min6570

Curaleaf Holdings Inc. (NURLF) stock popped almost 20% on the news it was acquiring privately-held multi-state operator Grassroots or GR Companies Inc. in a deal valued at $875 million. The deal will be made up of 108.8 million shares and $75 million at the closing which is expected in early 2020.

If the deal is completed, Curaleaf’s footprint grows from 12 states to 19 states and putting it within reach of Acreage Holding’s (ACRG.U) size. The company currently has 48 operating dispensaries, which would increase to 68 and the number of dispensary licenses would move from 70 to 131. The deal would also boost the company’s presence in the Midwest, where Grassroots is strong with 20 locations in Illinois and Pennsylvania.

“With the acquisition of Grassroots and the pending acquisition of Select, Curaleaf is the world’s largest cannabis company by both revenue and operating presence,” said Joseph Lusardi, CEO of Curaleaf. “With a combined 68 open dispensaries, this transaction significantly accelerates our expansion strategy and strengthens our reach across the medical and adult-use markets. In addition, it enhances the depth of our retail and wholesale platform across the country. By leveraging our scale, as well as our market-leading capabilities and expertise, we will continue to deliver value for our shareholders.”

Compass Point analyst Rommel Dionisio wrote, “Assuming the successful closing of this transaction as well as the recently announced agreement to acquire Select, Curaleaf would not only become the largest company in the U.S. cannabis industry, but also the largest player in the world by pro forma revenue.” His target price is $13 and the stock was lately trading at $7.74.

Select Aquisition

In May, Curaleaf said it was going to acquire Cura Partners, Inc. the owners of the Oregon-based Select brand, in an all-stock deal valued at C$1.27 billion or $948.8 million. The company said that the acquisition included Select’s manufacturing, processing, distribution, marketing, and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property. Select ‘s THC products are sold in more than 900 retailers, it is the leading cannabis brand in key Western states, including California, Arizona, Oregon, and Nevada. The combination of the two companies will provide immediate geographic diversification with Curaleaf’s footprint on the East Coast and Select’s brand strength on the West Coast.

Midwest

Dionisio also noted that the two states where Grassroots has planted its flag, Pennsylvania and Illinois are two key growth markets. “We believe Illinois represents the most important growth opportunity in the U.S. cannabis market in 2020, as that state, the fifth most populous in the country, opens up to recreational use on Jan. 1,” he wrote. He also pointed out that Pennsylvania is one of the fastest-growing with over 100,000 medical patients signed up since Feb. 2018. He increased his estimates for 2020 revenue from $696 million to $861 million and EBITDA from $180 million to $248 million. The EPS estimate was moved to $0.21 from $0.20.

Mitch Kahn, co-founder and CEO of Grassroots, said, “Today’s announcement is a testament to the hard work of the many employees that helped make Grassroots the leading cannabis company in the Midwest. This acquisition will enable us to give our patients and retail partners greater access to products that adhere to the highest standards of quality and reliability, and our employees the opportunity to be part of a best-in-class operator.”

Evan Eneman, CEO of MGO|ELLO Alliance, a cannabis finance, taxation, investment banking advisory and firm said, “This trend in M&A is an evolution in the cannabis industry, and as investors put serious capital into these deals, everyone is looking for guidance on who will be next.”

 

 


William SumnerWilliam SumnerJune 27, 2019
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4min6730

It’s time for your Daily Hit of cannabis financial news for June 27, 2019.

On the Site

Green Growth Brands

After a trial period of selling the Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) CBD line called Seventh Sense Botanical Therapy products, Abercrombie & Fitch (A&F) has decided to carry the products in 160 stores. The expansion includes Seventh Sense’s CBD-infused body lotions, muscle balms, lip balms, and sugar scrubs, and is Green Growth Brands’ second major wholesale agreement since the passage of the Agriculture Act of 2018 in December 2018.

Executive Spotlight: Dr. Jared Helfant, Co-Founder and President of Sparx Cannabis

At Sparx, Dr. Helfant applies his expertise to oversee operations, branding, and marketing. With a proven track record of providing top-tier, customer-facing services and long-term strategic planning, his knowledge helps facilitate budget analysis, marketing strategies, and partner relationships.

In Other News

Surterra Wellness

The medical cannabis company Surterra Wellness announced that it had closed a $100 million Series D funding round. So far, the company has raised over $300 million in private capital. Proceeds from the funding will go towards expansion initiatives such as strategic acquisitions and infrastructure capital expenditures. Surterra also announced that it had expanded its board of directors to include Ed Brown, Surterra’s Executive Director, and its Executive of Operations, Kevin Fisher.

Curaleaf

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) announced today that it had acquired both Glendale Greenhouse and Phytotherapeutics Management Services, LLC. Glendale Greenhouse is a vertically integrated cannabis business operating a cultivation and processing facility with a 20,000 square foot production facility capable of producing 3,600 pounds of flower annually. Glendale also owns a 1,500 square-foot dispensary and the master lease on the 15,000 square-foot multi-tenant building where the dispensary is located. Phytotherapeutics Management Services, LLC operates under the license of Phytotherapeutics of Tucson, LLC. Once the transaction is closed, the Phytotherapeutics’ license would be transferred to Curaleaf and apply to a newly developed, flagship dispensary.

Aleafia Health

Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF) (FRA:ARAH) has closed a $40.25 million over-subscribed public offering. Leading the offering was Mackie Research Capital Corporation and BMO Capital Markets, and included Canaccord Genuity Corp. “We are excited to close this financing and strengthen our balance sheet as we solidify and accelerate the expansion of our cannabis health and wellness ecosystem, in Canada, and globally,” said Aleafia Health CEO, Geoffrey Benic. “This is a key step enabling management to execute on its business plan and to drive operational results creating value for shareholders.”


William SumnerWilliam SumnerMay 1, 2019
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6min5920

It’s time for your Daily Hit of cannabis financial news for May 1, 2019.

On The Site

Curaleaf

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) is going to acquire Cura Partners, Inc. the owners of the Oregon-based Select brand, in an all-stock deal valued at C$1.27 billion or $948.8 million. The company said that the acquisition includes Select’s manufacturing, processing, distribution, marketing, and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property. The deal is expected to close in 2019.

Emerald Health

Emerald Health Therapeutics, Inc.  (TSXV: EMH) (OTCQX: EMHTF) delivered fourth quarter and 2018 results along with an update of its first-quarter sales. The revenue in the fourth quarter was $1.1 million versus last year’s $279 thousand for the same time period. The net loss in the fourth quarter was $13.9 million, higher than the third quarter’s losses of $6.4 million.

WeedMD

The licensed cannabis producer and distributor WeedMD Inc. (TSX-V: WMD) (OTCQX: WDDMF) announced its financial results for the fiscal year ending on December 31, 2018. WeedMD’s revenue for the full year grew from $1.4 million to $8.2 million, representing an increase of 456%. The company’s net and comprehensive loss declined dramatically, falling from $8.8 million to just $895,128.

In Other News

Golden Leaf

Golden Leaf Holdings Ltd. (CSE: GLH) (OTCQB: GLDFF) has reported its financial results for the 2018 fiscal year. Full-year revenue was $16.5 million, up 43% from $11.5 million in 2017. Gross profit declined slightly from 15% of total revenue ($1.7 million) to 13.3% of revenue ($2.2 million). The company’s comprehensive loss declined significantly, falling from $55.9 million in 2017 to $4.4 million, and its net loss was $4.6 million.  “Looking forward, we remain focused on growing revenue by expanding our retail footprint, product array and cultivation presence throughout the U.S. and Canada. At the same time, we are committed to growing responsibly while improving our margin growth and EBITDA. Towards that end, we have taken several measures this year to increase efficiencies throughout our organization to lower costs, increase cash flow and improve our overall financial performance,” said Golden Leaf CEO William Kulczycki.

Dixie Brands

Today, Dixie Brands Inc. (CSE: DIXI.U) (OTC: DXBRF) (Frankfurt: 0QV) announced their financial results for the fiscal year ending on December 31, 2018. Revenue for the year was $5.7 million, up 73% from $3.3 million in the previous year. Fourth quarter revenue was $1.5 million. The gross profit margin was 52% ($3.01 million), up from 47% ($1.5 million) in 2017. Net losses rose significantly, climbing from $4.3 million in the previous year to $21.23 million. Company management attributes the steep climb to “significant increase in operating and other expenses,” such as its reverse takeover of Academy Explorations Limited and public listing activities.  “The financing and public listing we completed in the final weeks of 2018 set the stage for a breakout year in 2019,” said Chuck Smith, President and CEO, Dixie Brands. “Dixie accomplished a lot as a private company, building up an industry-leading portfolio of more than 100 commercialized products.  We are very excited by our opportunities to invest our capital into strengthening our distribution network and market presence to accelerate our growth.”

Weekend Unlimited

Weekend Unlimited Inc. (CSE: POT) (FSE: 0OS1) (OTCQB: WKULF) today announced the appointment of Chris Backus as Interim President and CEO, effective immediately. Backus was appointed to the company’s Board in March of this year and previously served as a former Senior Officer and Manager with the Royal Canadian Mounted Police (RCMP). Backus will focus on the launch of the company’s wknd! brand product line, generating revenues with CHAMP and Verve beverages in the USA, and the ramp-up of the Northern Lights Organics hemp farm in Canada. “’I am energized to accept this leadership role with Weekend Unlimited. Working with the Board and the team, my focus is entirely toward harnessing the Company’s assets to deliver results for shareholders,”’ said. Backus. “This means an immediate mandate to execute on ready-to-go initiatives that will drive revenues while building strong consumer awareness of the Company’s brands. Simultaneously, we will responsibly advance our initiatives supporting growth in the longer term.”


Debra BorchardtDebra BorchardtMay 1, 2019
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4min10100

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) is going to acquire Cura Partners, Inc. the owners of the Oregon-based Select brand, in an all-stock deal valued at C$1.27 billion or $948.8 million. The company said that the acquisition includes Select’s manufacturing, processing, distribution, marketing, and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property. The deal is expected to close in 2019. The stock moved higher by over 8% on the news to lately trade at $10.72.

Select ‘s THC products are sold in more than 900 retailers, it is the leading cannabis brand in key Western states, including California, Arizona, Oregon, and Nevada. The combination of the two companies will provide immediate geographic diversification with Curaleaf’s footprint on the East Coast and Select’s brand strength on the West Coast.

“The transformational acquisition of Cura and the Select brand is another step in our journey to create the most accessible cannabis brands in the U.S.,” said Joseph Lusardi, CEO of Curaleaf. “The combination of Curaleaf and Select is a perfect fit. In addition, we intend to create significant operational synergies from the integration of Select’s wholesale business with our vertically-integrated cultivating, processing and retail platform.”

The statement said that proposed transaction will combine Curaleaf’s retail locations, vertical integration, wellness brand and strong East Coast market presence with Select’s wholesale model, lifestyle brand and leading West Coast market presence. Curaleaf said that significant cost synergies are expected to be realized through operational efficiencies, greater economies of scale, supply chain efficiencies and increased vertical integration.

“I could not be more excited about this transaction with Curaleaf and what it means for the Select brand and for our industry. The leading companies in the industry on the West Coast and the East Coast are now joining forces to progress the legalization and mainstream acceptance of cannabis across the country,” added Cameron Forni, CEO of Cura and founder of Select. “Cura and the Select brand would not have the exceptional platform for growth that we have today without the incredible team that has built our foundation – from our production staff to our sales and marketing teams, and our executive leadership.”

Earnings

Last months Curaleaf reported its financial and operating results for the fourth quarter and full year ended December 31, 2018. The fourth quarter total revenue of $32 million increased 49% sequentially and 408% over the 2017 fourth quarter. Curaleaf delivered a net loss of $16.5 million, a steep drop from the previous quarter’s loss of $33 million, but the company reported a gain of $600k in the fourth quarter of 2017.

Cura Partners

In 2018, Cura was named as one of the “Top 100 Companies to Work For” in Oregon by Oregon Business Magazine and placed No. 12 in the Large Companies category. In 2019, Cura won the award again demonstrating Cura’s ability to focus on its culture while growing its headcount by 400%.


Debra BorchardtDebra BorchardtMarch 20, 2019
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5min8170

Curaleaf Holdings, Inc. (CSE: CURA) (OTC: CURLF) reported its financial and operating results for the fourth quarter and full year ended December 31, 2018 after the market close on Wednesday. The fourth quarter total revenue of $32 million increased 49% sequentially and 408% over the 2017 fourth quarter. Curaleaf delivered a net loss of $16.5 million, a steep drop from the previous quarter’s loss of $33 million, but the company reported a gain of $600k in the fourth quarter of 2017. 

“2018 was a landmark year for Curaleaf. We successfully completed the largest ever U.S. cannabis RTO, experienced substantial growth, and have firmly set the foundation to capitalize on the shift in public sentiment toward cannabis in the U.S. and capture key expansion opportunities in 2019,” said Joseph Lusardi, Chief Executive Officer of Curaleaf. Lusardi continued, “Curaleaf has become the most accessible national cannabis brand with the largest operational branded dispensary footprint in the country and the recent launch of our CBD line under Curaleaf Hemp. We’ve done this through our strategic presence in highly populated, limited license states, which has served as an important foundation for our aggressive expansion plan across the country.”

Curaleaf opened seven new dispensaries during the quarter in key markets such as Florida and Arizona. 

2018

The total revenue for the full year 2018 increased 298% to $77.1 million versus $19.3 million in the year ending 2017. Retail and wholesale revenue increased 514% to $57.5 million, compared to $9.4 million. 

Full-year 2018 managed revenue was $87.8 million, compared with $28.4 million in managed revenues for the full year 2017. The increase was primarily derived from organic growth in Florida, the opening of three dispensaries in New York and the acquisitions in Massachusetts in March and Arizona in April.

Gross profit before the impact of biological assets for the full year 2018 was $45.9 million, compared to $11.5 million for 2017, resulting in a gross margin of 60%. The significant increase was due to improved operating capacity of the Company’s cannabis business as acquisitions were integrated and new dispensaries opened. Gross profit on cannabis sales were $26.4 million for the full year 2018, resulting in a 46% margin, compared to $1.5 million in the full year 2017.

Financial Highlights

The company raised $400 million in a private placement offering and debuted as a public company on the Canadian Securities Exchange on October 29, 2018

Neil Davidson, Chief Financial Officer of Curaleaf, added, “Curaleaf’s rapidly growing footprint is a direct result of our strong capital position, scaled operations and ability to strategically acquire assets that augment our existing platform.”

Looking Ahead

Curaleaf reaffirmed its full-year 2019 outlook for managed revenue of $400 million and free cash flow of $100 million.  The company said it plans to continue to grow its operations via expansion in three dimensions: acquiring licenses in limited license markets, increasing presence in current markets, and increasing exposure in mass markets. The company expects acquisition-related costs, marketing and selling expenses, and capital expenditures to increase as it expands its presence in current markets and expands into new markets.

 

 

 


Debra BorchardtDebra BorchardtMarch 18, 2019
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4min9460

Curaleaf Holdings, Inc. (CSE: CURA / OTCQX: CURLF) is acquiring Nevada-based Acres Cannabis in a deal valued at $70 million that is expected to close in 2019. According to the company statement, Acres operates Nevada’s largest cultivation facility, a state-of-the-art production and extraction lab and an immersive cannabis dispensary located in the city of Las Vegas, adjacent to the Strip, with a second dispensary under construction.

The acquisition is valued at $70 million, with $25 million to be paid in cash, $45 million to be paid in Curaleaf stock and additional consideration to be paid if certain financial targets are exceeded.

“The acquisition of Acres is a major step in expanding our vertical platform in Nevada. Acres operates a flagship dispensary in the heart of Las Vegas, complementing our existing assets in the state extremely well, and importantly, we can control the consistency, quality, and production cost of our own cannabis products,” said Joseph Lusardi, CEO of Curaleaf. “We have built the most accessible, trusted and reliable cannabis brand and are extremely excited about the prospects in Nevada both for retail and wholesale activity.”

Curaleaf said that the Acres acquisition will significantly increase its cultivation and manufacturing operations from which Curaleaf will supply its own flagship dispensary at 1736 Las Vegas Blvd in Las Vegas, scheduled to open in the second quarter of this year. Curaleaf said it will further continue the operation of its indoor grow facility, located near Las Vegas.

The addition of Acres’ cultivation platform will provide Curaleaf with 42,000 sq. ft. of functioning climate-controlled greenhouses and 227,000 sq. ft. of outdoor cultivation in Amargosa Valley. The site is currently under construction, adding another 133,000 sq. ft. of capacity. At over 400,000 sq. ft., the facility is expected to generate 100,000 pounds of dry flower per year at full scale. During the fourth quarter of 2018, Acres harvested over 5,000 pounds of flower.

“Curaleaf’s management, vision, and rapid expansion plans made them the natural fit for Acres,” said John Mueller, CEO of Acres. “Acres believes Curaleaf is very well positioned to continue to be the largest cannabis operator in the U.S. giving our partners significant upside.”

Acres also operates a 19,000 sq. ft. dispensary in Las Vegas. The cannabis experiential store is open 24 hours a day, 7 days a week, and hosts America’s first marijuana farmers market every weekend. Steeped in the cannabis culture, the facilities offer a museum and open view processing kitchen where customers can view the processing of edibles and extracts. Acres also has a second dispensary in Ely, Nevada currently under construction and scheduled to open later this year. The dispensaries are expected to be branded as Curaleaf by year-end to further expand its leading footprint as the largest operator of single-branded dispensaries in the U.S.

 

 

 



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