The Cannabis Sector Soared for the Second Day in a Row with Most Pot Stocks Closing the Day in the Green
Curaleaf Reported Record Revenue with Full-Year 2019 Sales Climbing 187% Over the Previous Year
Following yesterday’s strong bounce, cannabis stocks surged higher again today with the majority of pot stocks closing Tuesday’s trading session well into the green. For the second day in a row, U.S. multi-state operators (MSOs) like Curaleaf (CSE: CURA) (OTCQX: CURLF), which reported earnings today, led the way as the cannabis sector continued its strong performance compared to the broad market.
As we reported yesterday, pot stocks soared on Monday despite the North American stock market’s poor performance. With the market tide moving in synch with the marijuana sector today, cannabis stocks had an even stronger day, extending their impressive multi-day rally.
With renewed optimism surrounding the massive Coronavirus stimulus package, Wall Street rebounded in a big way. The Dow Jones Industrials Average (DJIA) skyrocketed a whopping 2,112.98 points (+11.37%) today, its largest single-day percentage gain since 1933. The S&P 500 (SPX) and Canada’s TSX Composite Index (TSX) followed suit rising 209.93 points (+9.38%) and 1,342.59 points (+11.96%), respectively.
It seems the pot sector has woken up, thanks in part to a COVID-19 related spike in demand for marijuana products and cannabis delivery services. With most Americans and Canadians forced into self-quarantine as part of the government’s strategy to slow the virus’ spread, many have turned to cannabis as a means to cope and pass the time.
To give you an idea of the size and scope of the huge gains posted today throughout the cannabis sector, check out the full list of today’s double-digit gainers below. We haven’t seen gains like these in a while.
- 48North (TSXV: NRTH) (OTCPK: NCNNF) | +70.6%
- Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ) | +34.9%
- Green Growth Brands (CSE: GGB) (OTCQB: GGBXF) | +27.3
- Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF) | +24.6%
- Meta Growth (TSXV: META) (OTCPK: NACNF) (FRA: 1HV) | + 20%
- TransCanna (CSE: TCAN) (OTC: TCNAF) (FRA: TH8) | +19.2%
- iAnthus (CSE: IAN) (OTCQX: ITHUF) (FRA: 2IA) | +19%
- KushCo Holdings (OTCQX: KSHB) | +18.6%
- MediPharm Labs (TSX: LABS) (OTCQX: MEDIF) (FRA: MLZ) | +15.5%
- Green Thumb (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2) | +14.2%
- Charlottes Web (TSX: CWEB) (OTCQX: CWBHF) | +12.7%
- Planet 13 Holdings (CSE: PLTH) (OTCQX: PLNHF) | +12.3%
- Harvest Health (CSE: HARV) (OTCQX: HRVSF) | +12.2%
- SOL Global (CSE: SOL) (OTCPK: SOLCF) (FRA: 9SB) | +11.1%
- Organigram Holdings (TSX: OGI) (NASDAQ: OGI) (FRA: 0OG) | +10.6%
- Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF) | +10.5%
Curaleaf Reports Strong Revenue Growth
Aftermarket close today, Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF) announced its financial results for the fourth quarter and year ended December 31, 2019. The company reported revenue that was in line with analysts’ expectations but also posted wider-than-expected losses.
For the fourth quarter, Curaleaf reported record total revenue of $75.5 million, up 22% quarter over quarter. The company also posted record adjusted EBITDA of $13.8 million, up 32% sequentially. Pro forma revenue for Q4 came in at a record $131.7 million.
Gross profit before the impact of biological assets for Q4 2019 was $39.8 million, compared to $20 million for Q4 2018. In the fourth quarter of 2019, gross profit on cannabis sales was $22 million, with a 38% margin. In last year’s fourth quarter, gross profit on cannabis sales was $11.8 million. Curaleaf’s Q4 net loss was $27.2 million. In Q4 2018, the company reported a net loss of $16.5 million.
For the full year 2019, Curaleaf announced record total revenue of $221 million, up 187% over 2018. The company also reported record adjusted EBITDA of $25.9 million, a significant improvement compared to a loss of $10.4 million in the previous year.
Gross profit before the impact of biological assets for 2019 came in at $118.6 million, compared to $45.9 million in last year. Gross profit on cannabis sales for the full year 2019 was $71.5 million with a 41% margin. In 2018, gross profit on cannabis sales was $26.4 million. The company’s net loss for 2019 was $69.8 million. In 2018, Curaleaf posted a net loss of $61.9 million.
As of the end of December 2019, Curaleaf had $42.3 million in cash and $105 million in outstanding debt. The company’s cash on hand reported at the end of Q4 2019 does not reflect the benefit of the recently completed $300 million term loan facility.
“In fiscal 2019, the Curaleaf team delivered record results with our organic business growth and recent strategic acquisitions, solidifying our position as the leading cannabis operator in the United States. The fourth quarter represented our third consecutive quarter of positive Adjusted EBITDA, driven by additional production and retail locations coming online in key states as well as the positive impact of our increasing economies of scale. With the completion of the Select acquisition, we are now focusing on the integration and rollout of the Select brand across Curaleaf. Overall, we remain well-positioned for improving growth and profitability in 2020,” stated Curaleaf CEO Joseph Lusardi.
Shares of Curaleaf’s CSE listed CURA stock closed trading today at $5.58 per share, up 24.6% on the day. The company’s U.S. OTC Markets listed CURLF stock closed the day at $3.85, also up 24.6% today.
Disclosure: TransCanna is a previous client of The Cannabis Investor. The Cannabis Investor holds a position in Liberty Health and iAnthus. The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.