Curaleaf Stock Remains My Top Marijuana Stock
In the battle for pot stock supremacy, there are a few names that get bandied about with regularity—you’ve no doubt seen many of them grace my columns in the past. And today, we’re coming back to an old favorite of mine: Curaleaf Holdings Inc (CNSX:CURA, OTCMKTS:CURLF).
That’s because Curaleaf—alongside a couple of rivals—is looking to be among the first pot companies to post $1.0 billion in revenue, something that’s likely to generate some serious momentum.
First, we need to remember just how important revenue is to a stock’s success.
That may seem like a given, but many forget that revenue often trumps profit when it comes to stock gains, especially for companies in their early stages of growth.
This is because investors are more interested in growth than in anything else. And growing revenue, even with little to no profit (or deficits), can have a profoundly positive impact on any stock’s future. It’s how so many tech companies have posted jaw-dropping losses for so long, but were still able to keep share prices rising via sequential revenue growth.
In other words, investors aren’t as interested in how much profit you can make today as they are in how much potential your business has to produce immense profits in the future.
CURLF Stock to Hit a Billion in Revenue?
And that, dear reader, is why revenue is often the most important number in a business’ quarterly report.
For Curaleaf Holdings Inc, that number is set to hit 10 figures, or over $1.0 billion.
Now, this is something that was promised for 2020. But considering how unexpected 2020 turned out to be, CURLF stock can be forgiven for falling short of that milestone last year.
In the end, the company ended up posting about $653.0 million of revenue in fiscal 2020. Not bad, but quite a bit shy of a billion. (Source: “Curaleaf Reports Record Fourth Quarter and Fiscal Year End 2020 Financial and Operational Results,” Curaleaf Holdings Inc, March 9, 2021.)
In any case, this still represented year-over-year growth of 184%. So again, it would be inaccurate to say that Curaleaf stock disappointed. It’s better to say that it failed to meet a very lofty, ambitious goal—something that it’s looking to rectify in 2021.
And so far, the numbers look strong.
Curaleaf posted total revenue of $260.3 million in the first quarter of 2021, up by about 13% over the $230.3 million in the prior quarter. This was a record for the company, showing 170% growth from the same period a year before. (Source: “Curaleaf Reports Record First Quarter 2021 Financial and Operational Results,” Curaleaf Holdings Inc, May 10, 2021.)
Its gross profit from cannabis sales also topped $128.0 million.
But it’s not enough to simply look at the revenue, of course; all that money had to come from somewhere. In this case, Curaleaf Holdings Inc finished the quarter with 102 retail locations across the U.S. and 1,992 partner accounts. This demonstrates that it’s continuing to expand, which in turn will help net larger revenue gains moving forward if everything goes according to plan.
The company was also busy overseas, acquiring EMMAC, Europe’s largest vertically integrated independent cannabis company. Curaleaf also secured $80.0 million in new capital for the European business subsidiary from a strategic investor to support future growth. (Source: Ibid.)
“Curaleaf delivered record first quarter 2021 financial results with total revenue exceeding the high-end of our guidance range as we extended our U.S. leadership, all while creating a new foundation for future international growth opportunities,” said CEO Joe Bayern.
Curaleaf launched a range of innovative new products to our retail and wholesale channels during the quarter, including our new Select Squeeze THC-infused beverage enhancer which marked our most successful product launch ever and represented one of the cannabis industry’s widest national product launches to date. With our revenue projected to increase to $305 million to $315 million in the second quarter, we also expect to generate significant improvements in terms of achieving positive net income and positive operating cash flows in the back half of 2021.
This is all great news for CURLF stock investors. If the numbers hold and the company continues to post these kinds of numbers, then hitting $1.0 billion in revenue will be no problem.
Pot Stock Competition
Yes, the $1.0 billion number is a bit arbitrary. There isn’t much material difference, after all, between $998.0 million, say, and $1.0 billion.
But the stock market isn’t all reason, rationality, and methodology; people are behind the stock market. And people are simply more impressed by the word “billion” than they are by “million,” so getting past that point is certain to spark some excitement in fickle human investors.
What’s more, it’s also sure to grab headlines, which is another way to gain the attention of retail investors (who make up a large chunk of the pot investment market).
So this is really good news across the board for Curaleaf stock, and why it remains my top pot stock due to its immense potential when U.S. marijuana legalization occurs.
The one issue is that two other marijuana companies—Trulieve Cannabis Corp (CNSX:TRUL, OTCMKTS:TCNNF) and Cresco Labs Inc (CNSX:CL,OTCMKTS:CRLBF)—are also close to hitting $1.0 billion in revenue. They should hit this mark if all goes well in 2021.
That does somewhat take the shine off CURLF stock (or at least make it appear less special). But even with that qualifying factor, posting such impressive revenue (and growth) puts this already dominant pot stock on the fast track to becoming the most impressive U.S. stock available, in my books.
While it may not be the only company to be nearing $1.0 billion in revenue in the marijuana industry, I still believe that Curaleaf Holdings Inc’s impressive leadership, financials, and foundations across the U.S. sustain it as my top pot stock in America for buy-and-hold investors.
Curaleaf, Trulieve, and Cresco are three companies that look poised to battle for supremacy in the pot industry. And if all goes as expected, they will all reach the $1.0-billion mark in revenue as early as next year.