Another Record-Breaking Cannabis Earnings Season is in the Books for the “Big 4” U.S. Multi-State Operators (MSOs)
Despite a global pandemic, American Cannabis Stocks are in the midst of a breakout year, with the nation’s largest cannabis operators leading the charge.
Below is our Q3 2020 earnings recap from the top 4 U.S. MSOs Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF), Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF), Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2) and Cresco Labs (CSE: CL) (OTCQX: CRLBF).
Included in the recap are earnings and operations highlights from each company’s third-quarter earnings report as well as their corresponding earnings investor conference calls.
- The company posted record revenue for Q3 of $136.3 million, up 13% quarter over quarter and 93% over last year.
- Adjusted EBITDA for the quarter was $67.5 million, equal to 50% of revenue and marking the company’s 11th straight quarter of growth and profitability.
- Recorded its first quarter of positive free cash flow.
- Ended the quarter in a strong cash position with $193.4 million in cash and cash equivalents.
- Reported wholesale revenue of $90 million, which was the highest in the cannabis industry.
- Disclosed that its same-store sales grew by 15% quarter over quarter and 178% year over year.
- The company’s California revenue increased by 56% from the prior quarter.
- Compared to Q1, the company’s Q3 revenue grew $87 million, while SG&A remained flat.
- The company reported that its SG&A fell to 31% of revenue, down from 48% last quarter and expected to decrease.
- Projected that its near-term growth will primarily come from California, Illinois and Pennsylvania.
“Following an outstanding quarter, industry-leading profitability, and our recent entry into two additional states in the northeast, Trulieve has never been better positioned for the future. Our third quarter was especially memorable because we introduced the long-awaited edibles product lines to our offerings and announced our acquisitions in Pennsylvania, where we see tremendous growth potential. Just last week, the Pennsylvania acquisitions closed, and we were awarded a processor license in West Virginia. We also recently achieved our 2020 goal of opening 68 stores nationwide and expect our strong growth to continue. Going forward, we will continue to provide best-in-class customer experiences for our Trulievers while strategically expanding our operations to accelerate growth.” – Kim Rivers, Trulieve CEO.
- Read/Listen to Trulieve’s Q3 2020 Earnings Call Transcript
- View Trulieve’s Q3 2020 Earnings Press Release
- Reported record managed revenue of $193.2 million, up 59% quarter over quarter and 164% over last year.
- Posted record total revenue of $182.4 million, up 55% sequentially and 195% year-over-year.
- Announced record adjusted EBITDA of $42.3 million, 51% over last quarter and over 300% over 2019.
- Recorded a 7x increase in wholesale revenue year over year.
- Finished the quarter with $84.6 million in cash on hand.
- Closed the long-awaited Grassroots acquisition, making Curalead the world’s largest cannabis company.
- Also closed its Maine and New Jersey acquisitions.
- Established the largest market share in New Jersey and doubled its cultivation capacity ahead of recreational cannabis.
- Expanded its cultivation capacity in Illinois, which has the highest wholesale prices in America.
- Launched its flagship “Select” brand into Ohio, Illinois and Pennsylvania.
- Now has its products in a total of 96 dispensaries in 23 states.
- The company is Projecting $250 million in pro forma revenue for Q4 2020.
“Curaleaf’s record third-quarter results were complemented by the successful completion of our acquisition of Grassroots, which expanded our presence into 6 new states, including high-growth markets such as Illinois and Pennsylvania. As we head into 2021, Curaleaf remains incredibly well-positioned following the transformative legalization of adult-use cannabis in Arizona and New Jersey, and consequently the potential of future adult-use in New York, Pennsylvania and Connecticut. Each of these markets presents an enormous opportunity for us, as the only MSO with a leading presence in every one of these states. Looking forward, we expect our growth will be driven by organic initiatives, increased capacity and dispensaries in key states and the rollout of adult-use in Arizona and New Jersey.” – Joseph Lusardi, Curaleaf CEO.
- Posted revenue of $157.1 million, up 31.3% quarter-over-quarter and 131.1% over last year.
- Wholesale revenue grew 33% over the prior quarter.
- Reported adjusted Operating EBITDA of $53.2 million, up 50.2% over the past quarter and equal to 33.9% of revenue.
- Achieved a new milestone with a positive net income of $9.6 million or $0.04 per basic and diluted share.
- Recorded positive cash flow from operations for the third consecutive quarter.
- Reported that SG&A fell to 32% of revenue, down from 45% in the prior year.
- Ended the quarter with a strong balance sheet with $78 million in cash on hand, allowing for financial flexibility and continued growth in 2021.
- Completed its cultivation expansions in Illinois, Ohio and Pennsylvania.
- The company now has operations in 11 states, with its products now in 48 dispensaries.
- Anticipates the start of recreational cannabis sales in New Jersey in 2021.
- Announced it satisfied all requirements to uplist to the NYSE, pending regulatory approval.
“This was an excellent quarter for Green Thumb as we delivered substantial revenue growth, and our ‘Enter, Open, Scale’ strategy is generating meaningful operating leverage across our business. We expanded gross margins and EBITDA margins quarter-over-quarter while delivering positive net income for the first time. This was driven by the execution of our capital projects in Illinois, New Jersey, Pennsylvania and Ohio, and the rebound in our Nevada and Massachusetts markets following the initial impact of COVID-19. We are poised to further benefit from the strong tailwinds driving a robust, multi-billion-dollar marketplace*.” – Ben Kovler, Green Thumb, CEO
- Reported record revenue of $153.3 million, up 63% sequentially and 324% year over year.
- Posted record adjusted EBITDA of $46.4 million, up 182% quarter over quarter.
- Announced retail revenue of $62.8 million, up 60% over the previous quarter.
- Disclosed, its same-store sales grew 15% from the prior quarter and 178% over last year, as well as a 56% quarter-over-quarter increase in California revenue.
- Reported record cash flow from operations of $17.8 million.
- Announced its SG&A fell to 31% of revenue, down from 48% in the prior quarter, which the company expects to continue decreasing.
- Recorded its first quarter of positive free cash flow.
- The company expects its near-term growth will primarily come from California, Illinois and Pennsylvania.
“Cresco Labs entered the third quarter firing on all cylinders achieving record levels of revenue, profitability, and cash flow. We remain the number one operator in the industry focused on and delivering results in the wholesale distribution of branded products. Our retail is outperforming, and we are generating substantial operating leverage. Comparing Q1 to Q3, we increased revenue by $87 million while keeping SG&A flat. The investments we made to support growth are paying off, and as a result, our profitability has grown dollar for dollar with gross profit. Because of the decisions we’ve made, the changes we’ve managed through and the hard work devoted by our team over the last 12 months, Cresco Labs has substantiated itself within the very top tier of the industry and confirmed the value that is driven by our differentiated strategy. This is a unique story of strategic breadth, depth and execution. As we look toward our next phase of growth, it’s rinsed and repeat – the playbook will be applied to more states and, again, we will achieve meaningful, material market positions.” – Charles Bachtell, Cresco Labs, Co-founder and CEO
This U.S. Cannabis Stock Appears to Be Way Undervalued and May Actually Benefit From a Second Wave of the Pandemic
Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.