The Bright Future of CURLF Stock
It’s no secret I’m a huge fan of Curaleaf Holdings Inc (CSNX:CURA OTCMKTS:CURLF). Curaleaf stock has been a winner for investors since I first wrote about it a few years back.
But as is the case with any asset, there comes a time when CURLF stock must be reevaluated to see if it still has potential or if it’s time to cash out and move on.
What’s the current situation with Curaleaf Holdings Inc? In my view, the sky is still very much the limit for this premier marijuana stock.
So, what makes Curaleaf stock such an exciting prospect in the first place?
As I’ve said before, it all boils down to one word: geography.
How so? Well, Curaleaf Holdings Inc is based in the U.S.
That’s hardly a unique position; the number of U.S.-based marijuana companies in the past few years has grown exponentially. Being based in the U.S. alone isn’t what makes CURLF stock special.
Rather, what makes the company special is that it’s been leveraging its position as a major player to expand across the country.
While other pot companies have been content to sit tight and make a few quick bucks off the hype surrounding the marijuana market, Curaleaf Holdings Inc has been aggressive in its acquisition and expansion strategy.
Chart courtesy of StockCharts.com
Curaleaf’s wide network of marijuana stores and production facilities has uniquely situated the company to profit immensely when federal U.S. marijuana legalization eventually becomes a reality.
Of course, we don’t know when that will occur, but we do know that, with each state-level legalization of marijuana, Curaleaf Holdings Inc has become increasingly aggressive about expanding.
Its moves are indicative of an ambitious company with revenues that can back up its ambitions. Look at its most recent quarterly report if you don’t believe me.
Curaleaf Holdings Inc’s Third-Quarter Report
Curaleaf has once again impressed investors, this time with revenues of about $317.1 million in the third quarter of 2021. (Source: “Curaleaf Reports Third Quarter 2021 Results,” Curaleaf Holdings Inc, November 8, 2021.)
While its revenue growth quarter to quarter wasn’t spectacular (but was still positive, at two percent), the company did generate $52.0 million from sales in the third quarter. What’s more, Curaleaf Holdings Inc was able to register a cash stockpile of $317.0 million.
All this speaks to a well-financed company that has both the disposition and the means to be a major player in the U.S. marijuana market as more opportunities for acquisitions open up.
Curaleaf Holdings Inc’s executive chair, Boris Jordan, said management was “prioritizing growth and gaining market share.” (Source: Ibid.)
“As a result, we remain on track to achieve our $1.2 to $1.3 billion annual revenue guidance, albeit at the lower end of the range, representing growth of over 90%. Strategic [merger and acquisition] remains a key pillar [of] our growth plan.”
Jordan added, “We closed the Los Sueños Farms acquisition in October, and today announced another highly strategic deal to acquire Tryke Companies, a vertically integrated [multistate operator] which bolsters our leadership position in Nevada, Arizona, and Utah and will be immediately accretive to our margins and cash flow.”
Two big things that stand out are Curaleaf Holdings Inc’s acquisitions and its revenue of more than $1.0 Billion. Those are good signs that Curaleaf stock will be able to continue rising in 2022.
The acquisitions allow the company to grow its revenue quarter after quarter. What’s more, each acquisition puts the company in a better position than before to benefit from the massive potential inherent in the U.S. market, with marijuana legalization on the horizon.
Curaleaf Holdings Inc’s revenue allows it to finance its acquisitions with cash on hand and permits the company to access huge sums of credit if needed.
Of course, there continues to be an issue with banks loaning money to U.S. marijuana companies. That’s because they remain illegal at the federal level, even though marijuana is legal in several states.
But even with that barrier, thanks to its high revenue, Curaleaf Holdings Inc is able to acquire the funds it needs to continue its aggressive expansion plan. And with each new acquisition, the company can expect a boost in its revenue, which can then be used to execute more acquisitions.
The situation that CURLF stock investors find themselves in right now is quite ideal.
With boatloads of cash, growing revenues, and a U.S. market full of opportunities, Curaleaf Holdings Inc has the ability to become one of the largest marijuana producers on the planet.
What’s more, with Curaleaf stock on a bit of downswing lately, investors who thought they had missed the boat have another chance to get in. And that would make the returns all the sweeter if CURLF stock makes a major rally in 2022.