- U.S. Cannabis Stocks Are in the Midst of a Massive Breakout Year, Despite a Global Pandemic
- Leading Multi-State Operators Trulieve, Curaleaf, Green Thumb and Cresco Labs Recently Released Another Set of Excellent Earnings Further Fueling the U.S. Cannabis Sector’s 2020 Bull Market Rally
After being deemed essential in every U.S. state where it is legal, the American cannabis boom has only grown stronger over the course of 2020. States like Michigan and Illinois, where recreational marijuana was legalized within the last year, have been turning out near-weekly new sales records.
U.S. cannabis stocks, also known as multi-state operators (MSOs) are thriving and after the most recent set of earnings, appear to be just getting warmed up.
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) are the largest MSOs in the U.S., based on revenues.
Below we’ve put together a recap of the top highlights from each company’s second-quarter 2020 financial results and earnings conference call.
Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF)
TRUL Q2 2020 Earnings Highlights
- Generated record revenue of $120.8 million, up 26% from the previous quarter and well above the consensus analyst estimate of $106.8 million
- Posted adjusted EBITDA of $60.5 million, which also crushed the street’s forecast of $45 million
- Announced net income of $6.6 million
- Recorded its 10th consecutive quarter of revenue and profitability growth; industry-leading 75% gross margin
- Posted $51 million in free cash flow YTD, with a $150 million cash balance
- Increased FY20 revenue guidance to $465-$485 million and EBITDA guidance to $205-$225 million
- Opened 5 new dispensaries during the quarter; a total of 68 operating dispensaries by the end of 2020
- Operate 20% of Florida stores with great than 50% market share in oil and flower
- Announced 75% of customers are loyalty program members; 76% customer retention rate; 30% increase in same-store sales
Read/Listen to Trulieve’s Q2 2020 Earnings Call Transcript
Source: Barchart
Learn more about Trulieve: Website | IR Website | Investor Deck | TRUL Chart
Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF)
CURA Q2 2020 Earnings Highlights
- Generated total revenue of $117.5 million, up 142% year over year and 22% over the previous quarter
- Posted managed revenue and pro forma revenue of $121.4 million and $165.4 million, respectively
- Reported adjusted EBITDA of $28 million, up 534% year over year and 40% sequentially
- Recorded a vastly improved net loss of $2 million compared to its net loss of $15.1 million in Q1 2020 and $24.5 million in last year’s second quarter
- Closed the Grassroots acquisition in July; now operates in 23 states and addresses 2/3rd of the U.S. population; 135 dispensaries and 50 production facilities
- Will add 250,000 square feet of growing space across multiple states before the end of 2020; canopy space expected to double during the year, not counting Grassroots; 110,000 square foot facility in New Jersey expected in early 2021
- The company’s flagship brand, Select, is now available in 12 states, up from 6 in February; top 3 vape market share in California, Oregon, Nevada, Arizona and Maryland
- New Jersey expected to legalize this year, followed quickly by New York, Connecticut and Pennsylvania, states where Curaleaf is investing heavily
- Generated operating cash flow of $23.4 million; raised $66.5 million after the quarter
- Will open 17 dispensaries across 5 states by the end of 2020
Read/Listen to Curaleaf’s Q2 2020 Earnings Call Transcript
Source: Barchart
Learn more about Curaleaf: Website | IR Website | Investor Deck | CURA Chart
Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2)
GTII Q2 2020 Earnings Highlights
- Generated total revenue of $119.6 million, up 16.6% quarter over quarter and 167.5% over the previous year
- Recorded adjusted operating EBITDA of $35.4 million, up 38.6% quarter over quarter
- Posted a net loss of $12.9 million or ($0.06) per share
- 2020 first-half revenue and adjusted EBITDA higher than all of 2019
- Wholesale revenue grew 22% sequentially; branded products available across 10 states
- Rebranding Essence dispensary on the Las Vegas Strip to Cookies, a well-known cannabis retailer out of California
- Completed Ohio production facility and began the sale of branded products statewide; facilities in Illinois and Pennsylvania to be completed in coming weeks, doubling production in each state
- Cash flow positive; cash balance increased $11 million sequentially; all planned expansion projects fully funded
Read/Listen to GTI’s Q2 2020 Earnings Call Transcript
Source: Barchart
Learn more about GTI: Website | IR Website | Investor Deck | GTII Chart
Cresco Labs (CSE: CL) (OTCQX: CRLBF)
CL Q2 2020 Earnings Highlights
- Generated record revenue of $94.3 million, up 42% over the previous quarter
- Posted record adjusted EBITDA of $16.5 million, up 419% quarter over quarter
- Recorded a net loss of $4.7 million including changes in fair value of biological assets, unrealized gains and losses on mark-to-market instruments as well as interest expenses and tax expenses
- Grew revenues by at least 30% in all states, minus Massachusetts
- $55 million in wholesale revenue, largest in the industry
- Achieved positive free cash flow
- Secured funding to expand wholesale capacity in Ohio, Massachusetts and Michigan
- Opened 9th Illinois dispensary, the most in the state
- Cultivation expansion will bring gross margin over 50% moving forward
Read/Listen to Cresco Lab’s Q2 2020 Earnings Call Transcript
Source: Barchart
Learn more about Cresco Labs: Website | IR Website | Investor Deck | CL Chart
Conclusion
Another great set of quarterly earnings are in the books for the top U.S. cannabis operators. Trulieve, Curaleaf, Green Thumb and Cresco Labs all experienced exploding revenues and their rapid infrastructure growth is driving profitability. The American cannabis space is projected to continue its impressive growth with up to 8 new U.S. states expected to legalize cannabis during the upcoming 2020 election.
As the COVID-19 pandemic continues, the cannabis industry is continuing to demonstrate its standing as a consumer staple, ranking marijuana right up there with defensive and recession-proof sectors such as alcohol and tobacco. A fantastic sign for cannabis investors moving forward.
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Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.
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