{"id":4595,"date":"2022-03-04T16:16:00","date_gmt":"2022-03-04T16:16:00","guid":{"rendered":"http:\/\/CBMiSmh0dHBzOi8vd3d3LmJhcnJvbnMuY29tL2FydGljbGVzL2N1cmFsZWFmLXN0b2NrLWNhbm5hYmlzLXNhbGVzLTUxNjQ2NDAzNzIw0gFOaHR0cHM6Ly93d3cuYmFycm9ucy5jb20vYW1wL2FydGljbGVzL2N1cmFsZWFmLXN0b2NrLWNhbm5hYmlzLXNhbGVzLTUxNjQ2NDAzNzIw"},"modified":"2022-03-04T16:16:00","modified_gmt":"2022-03-04T16:16:00","slug":"curaleaf-stock-is-in-a-slump-but-northeast-recreational-sales-are-coming-barrons","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=4595","title":{"rendered":"Curaleaf Stock Is in a Slump. But Northeast Recreational Sales Are Coming. – Barron’s"},"content":{"rendered":"
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Curaleaf posted sales of $320 million for its latest quarter.<\/h4>\n

Jeenah Moon\/Bloomber <\/span> <\/figcaption><\/figure>\n<\/p><\/div>\n

The world\u2019s biggest licensed cannabis<\/a> seller, Curaleaf Holdings <\/a>,<\/span><\/span> nearly doubled its sales in 2021, and can expect recreational sales to begin in New Jersey, Connecticut, and New York in the next year or so. But the 2022 guidance it released with its December quarter results wasn\u2019t as strong as analysts expected. That won\u2019t help a stock (ticker: CURLF) that has underperformed in the past few weeks.<\/p>\n

\u201cWe had a great year in 2021, growing over 93%,\u201d Chief Executive Joe Bayern told Barron\u2019s<\/em> Friday. \u201cIt really highlights the dislocation between the growth story in U.S. cannabis and the valuations that we\u2019re seeing.\u201d<\/p>\n

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Curaleaf stock was down 4% in Friday morning trading in the U.S. over-the-counter market, to $5.87. The company and other multi-state operators are licensed to sell cannabis under the laws of the states where they operate, but the product remains federally illegal<\/a>\u2014so the U.S. operators can only list their shares on the small Canadian Securities Exchange.<\/p>\n

Curaleaf\u2019s revenue for 2021 was $1.2 billion, the company reported Thursday evening. It had a net loss of $102 million, but its earnings before interest, taxes, depreciation, and amortization, or Ebitda, doubled to $298 million\u2014after adjusting for stock compensation and expenses that the company considers one-time events. For December\u2019s quarter, sales grew 39% to $320 million, while adjusted Ebitda was $80 million and the net loss was $28 million, or 4 cents a share.<\/p>\n

On a conference call after Thursday\u2019s close, Curaleaf executives talked about their hopes for the start of adult recreational cannabis sales in New Jersey and other northeastern states. But New Jersey and its neighboring states have taken longer than expected to launch adult sales<\/a>, and Curaleaf\u2019s 2022 guidance for sales between $1.4 billion and $1.5 billion was around 5% below consensus estimates. Curaleaf now expects New Jersey recreational sales to start in May. Connecticut should begin later this year, and New York in 2023.<\/p>\n

After recreational sales start in New York, New Jersey and Connecticut\u2014and perhaps get approved in Pennsylvania and Maryland\u2014those markets could grow to $12 billion in annual sales, Bayern told Barron\u2019s<\/em>. That growth spurt in 2022 and 2023 could be followed by a start for recreational sales in Germany in 2024. Curaleaf is the only U.S. operator with a meaningful position in the incipient European market, the CEO says.<\/p>\n

\u201cAny other industry growing at our rate would be trading at three times the multiple,\u201d said Bayern. The reasons for that mispricing, he said, are the inability of institutional investors to buy shares in the U.S. operators\u2014because of marijuana\u2019s federal illegality\u2014and, of course, the product\u2019s illegality under the laws of the U.S. and many states.<\/p>\n

The chief executive said that polls show most Americans favor legalizing cannabis. <\/p>\n

\u201cIt\u2019s time for the state and federal governments to realize they are here to carry out the will of their citizens,\u201d he said.<\/p>\n

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