Curaleaf Reports First Quarter 2022 Results

First Quarter 2022 Revenue of $313 Million, up 20% YoY

First Quarter 2022 Adjusted EBITDA(1) of $73 Million, up 16% YoY

First Quarter 2022 Cash Flow from Operations of $57.4 Million or 18% of Revenue 

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer products in cannabis, today reported its financial and operating results for the first quarter ended March 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated.

First Quarter 2022 Financial Highlights (Unaudited) 
($ thousands, except per share amounts)Q1 2022Q4 2021 % qoq 
Change
Q1 2021
(As Restated)
 % yoy 
Change
Total Revenue$313,074$320,011-2%$260,32020%
Gross profit before impact of biological assets$154,870$159,437-3%$128,46721%
Gross profit on cannabis sales(1)(2)$153,617$158,809-3%$128,03020%
Gross margin on cannabis sales(1)(2)49.3%49.7%49.3%
Adjusted EBITDA(1)(2)$72,945$79,675-8%$62,62516%
Net loss attributable to Curaleaf Holdings Inc.$(19,985)$(27,543)$(14,818)
Net loss per share – basic and diluted$(0.03)$(0.04)$(0.02)
(1)Represents a Non-IFRS financial measure or Non-IFRS ratio without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers.
(2)See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios. See the sections entitled “Gross Profit on Cannabis Sales” and “Adjusted EBITDA” below (pgs. 3-4) for reconciliations of Non-IFRS measures to the most directly comparable IFRS measures.

Earnings Call: Monday, May 9, 2022, at 5:00 P.M. ET
Conference ID # is 8760576
Replay ID # is 3727058 

U.S. Callers: +1-888-317-6003
International Callers: +1-412-317-6061
Canadian Callers: +1-866-284-3684

U.S. Replay: +1-877-344-7529
International Replay (Toll): +1-412-317-0088
Canadian Replay: +1-855-669-9658

The teleconference will be rebroadcasted starting at 7:00 P.M. ET
on May 9, 2022 and will end at 7:00 P.M. ET on May 16, 2022 

Boris Jordan, Executive Chairman of Curaleaf, commented, “Our national footprint has always been a key advantage of our growth strategy, and despite a tough macro environment during the first quarter, Curaleaf continued to grow share in several important markets. We saw strong month-over-month growth beginning in March and heading into the second quarter, boosting confidence in our ability to hit full year revenue guidance of $1.4 billion – $1.5 billion. Given renewed optimism surrounding federal banking reform, a record breaking 4/20, the exciting launch last month of New Jerseyadult-use sales, and the prospect of New York following suit, 2022 is shaping up to be another milestone year.”

Joe Bayern, Chief Executive Officer of Curaleaf, stated, “Our continued focus on research & development of innovative new products, commercialization, national distribution and brand building were cornerstones of the first quarter. From the launch of our proprietary ACE extraction system in Florida – which produces the purest live rosin product in the market – to new products launched in the last 12 months generating 17% of our revenues, our long-term focus on attracting new consumers with highly formulated products backed by science continues to drive growth. This advantage will help Curaleaf continue to expand Adjusted EBITDA margins.”

First Quarter Operating Highlights

  • Added 11 new retail dispensaries, closing the quarter with 128 total locations, and serviced over 2,200 wholesale partner accounts.
  • Completed the acquisition of Bloom Dispensaries, a vertically integrated, single state cannabis operator in Arizona, which added four retail dispensaries and two adjacent cultivation and processing facilities totaling approximately 63,500 sq. ft.
  • Launched a solventless Select Live Rosin product in Florida featuring an aromatic, pure cannabis flavor created through the Company’s live harvesting, flash-freezing and proprietary extraction process.

Post First Quarter Operating Highlights

  • Commenced adult-use sales in New Jersey, an estimated $2.3 billion market by 2026 according to BDSA.
  • Signed a distribution agreement with WB Canna Co. & Wellness which will launch Curaleaf’s Hemp and Select CBD product lines in the U.S. Virgin Islands, Puerto Rico, Aruba, Bermuda, Barbados, Cayman, Costa Rica, Guatemala, Jamaica, and Saint Maarten, as well as additional markets in Latin America.
  • Expanded Select’s CBD line with the launch of Select CBD Bites, available across the U.S. in-store and online. Select’s latest offering is infused with purified, broad-spectrum hemp to provide targeted wellness benefits featuring diverse cannabinoids without the psychoactive effects of THC.
  • Executed historic 4/20 with net revenue increasing 45% year-over-year. 
Financial Results for the First Quarter Ended March 31, 2022
Revenue (Unaudited)
($ thousands)
Q1 2022Q4 2021Q1 2021
Retail revenue$226,109$225,592$187,677
Wholesale revenue85,71293,79172,206
Management fee income                                               1,253628437
Total Revenue$313,074$320,011$260,320
Number of retail stores128117102
Wholesale accounts (1)2,2002,3002,000
(1)During the fourth quarter 2021 the Company ceased distribution operations in Oklahoma representing ~115 wholesale accounts.


Total revenue increased by 20% to $313 million during the first quarter of 2022, compared to $260 million in the first quarter of 2021. The Company’s year-over-year revenue growth primarily reflects continued organic growth driven by new retail store openings, the addition of new wholesale partner accounts, product launches, and the expansion of cultivation and production facilities. 

Retail revenue increased by 21% to $226 million during the first quarter of 2022, compared to $188 million in the first quarter of 2021, representing 72% of total revenue. Growth in retail revenue was primarily due to strong organic growth across Curaleaf’s footprint and the opening of 26 new stores over the year, namely in Arizona, Florida, and Pennsylvania.

Wholesale revenue increased 19% to $86 million during the first quarter of 2022, compared to $72 million in the first quarter of 2021, representing 27% of total revenue. Growth in wholesale revenue was due to an over 10% year-over-year expansion in the number of wholesale accounts as well as additional capacity coming online in key markets.

Gross Profit on Cannabis Sales (Unaudited)
($ thousands)
Q1 2022Q4 2021Q1 2021
Retail and wholesale revenue$311,821$319,383$259,883
Cost of goods sold158,204160,574131,853
Gross profit on cannabis sales (1)$153,617$158,809$128,030
Gross margin on cannabis sales (1)49.3%49.7%49.3%
Management fee income (2)1,253628437
Gross profit before impact of biological assets$154,870$159,437$128,467
(1)Represents a non-IFRS measure or Non-IFRS ratio. See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios.
(2)Management fee income is added to Gross Profit on Cannabis Sales to obtain Gross profit before impact of biological assets, the most comparable IFRS measure.  


Gross profit on cannabis sales was $154 million for the first quarter of 2022, compared to $128 million in the first quarter of 2021. Gross profit margin reached 49.3%, equivalent to the first quarter of 2021. 

Net Income / (Loss) (Unaudited)
($ thousands)
Q1 2022Q4 2021Q1 2021
(As Restated)
Total Revenue$313,074$320,011$260,320
Gross profit179,044179,546140,814
Income from operations43,73242,87536,098
Total other expense, net(22,347)(32,649)(20,208)
Income tax expense(43,142)(40,281)(30,708)
Net loss(21,757)(30,055)(14,818)
Less: Net loss attributable to non-controlling interest(1,772)(2,512)
Net loss attributable to Curaleaf Holdings, Inc.$(19,985)$(27,543)$(14,818)


For the first quarter of 2022, net loss attributable to Curaleaf Holdings, Inc. was $20 million, compared to a net loss of $15 million in the first quarter of 2021. The net result was primarily impacted by approximately $12 million of higher income tax expense and $2 million of higher other expense, net, partially offset by a $8 million increase in operating income. 

Adjusted EBITDA (Unaudited)
($ thousands)
Q1 2022Q4 2021Q1 2021
(As Restated)
Net loss$(21,757)$(30,055)$(14,818)
Interest expense, net23,79022,62620,623
Income tax expense43,14240,28130,708
Depreciation and amortization (1)41,15737,50727,761
Share-based compensation5,0939,1754,907
Other (income) expense(1,443)10,023(415)
Change in fair value of biological assets(24,174)(20,109)(12,347)
Other add-backs (2)7,13710,2276,206
Adjusted EBITDA (3)$72,945$79,675$62,625
Adjusted EBITDA Margin (3)23.4%24.9%24.1%
(1)Depreciation and amortization expense include amounts charged to cost of goods sold on the statement of profits and losses. 
(2)Other add-backs primarily include acquisition related expenses including fair market value adjustments on inventory related to acquisitions, legal fees, accounting and professional fees.
(3)Represents a non-IFRS measure or Non-IFRS ratio. See “Non-IFRS Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-IFRS financial measures and Non-IFRS ratios. The table above provides a reconciliation of Net Loss, the most comparable IFRS measure, to Adjusted EBITDA, a non-IFRS measure.


Adjusted EBITDA was $73 million for the first quarter of 2022, compared to $63 million for the first quarter of 2021. The year-over-year increase in adjusted EBITDA was primarily driven by solid revenue growth combined with operating leverage. The year-over-year decrease in Adjusted EBITDA margin reflects greater SG&A expenditures due to increased headcount in support of new store openings, higher levels of expenses related to research and development activities, and marketing in support of new product rollouts.

Balance Sheet and Cash Flow

As of March 31, 2022, the Company had $243 million of cash and $584 million of outstanding debt net of unamortized debt discounts.

During the first quarter of 2022, Curaleaf invested $30 million net in capital expenditures mostly attributable to cultivation, processing, and retail sites development activities.

Shares Outstanding

As of March 31, 2022 and December 31, 2021, the Company’s weighted average subordinate voting shares outstanding amounted to 708,897,273 and 707,450,310 shares, respectively.

As of March 31, 2022 and December 31, 2021, the Company’s issued and outstanding subordinate voting shares plus multiple voting shares amounted to 709,812,195 and 708,340,434 shares, respectively.

Other

As disclosed in the Company’s Consolidated Annual Financial Statements for the year ended December 31, 2021, the Company made an immaterial restatement to the initial purchase accounting for the Select acquisition. Adjustments have been made to the comparative period financial statements presented herein, which reflect a decrease in amortization expense, as applicable. The net impact of the adjustment on the Company’s Interim Consolidated Statements of Profits and Losses for the three months ended March 31, 2021, was a positive $2.4 million to Net loss attributable to Curaleaf Holdings, Inc.

Non-IFRS Financial and Performance Measures 

Curaleaf reports its financial results in accordance with IFRS and uses a number of financial measures and ratios when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with IFRS. Curaleaf refers to certain Non-IFRS financial measures and ratios such as “Gross Profit on Cannabis Sales”, “Gross Margin on Cannabis Sales”, “Adjusted EBITDA”, and “Adjusted EBITDA Margin”. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. The Company defines “Gross Profit on Cannabis Sales” as retail and wholesale revenues less cost of goods sold. “Gross Margin on Cannabis Sales” is defined by Curaleaf as gross profit on cannabis sales divided by retail and wholesale revenues. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and other add-backs related to business development, acquisition, financing and reorganization costs. “Adjusted EBITDA Margin” is defined by Curaleaf as Adjusted EBITDA divided by total revenue. Curaleaf considers these measures to be an important indicator of the financial strength and performance of our business. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with IFRS, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables provided in this press release contained in the sections “Gross Profit on Cannabis Sales” and “Adjusted EBITDA” (pgs. 3-4) provide reconciliations of Non-IFRS measures to the most directly comparable IFRS measures. 

Consolidated Statements of Financial Position($ thousands)
March 31,December 31,
20222021
(Audited)
Assets
Current assets:
Cash$242,598$299,329
Accounts receivable66,80964,570
Inventory, net433,414391,195
Biological assets89,91878,600
Assets held for sale98,24080,583
Prepaid expenses and other current assets44,53435,667
Current portion of notes receivable2,4622,315
Total current assets977,975952,259
Deferred tax asset2,6752,593
Notes receivable842
Property, plant and equipment, net400,746379,720
Right-of-use assets, net307,944285,111
Intangible assets, net1,175,7731,010,008
Goodwill665,046605,496
Investments4,1094,401
Prepaid acquisition consideration
Other assets17,66622,048
Total assets$3,551,934$3,262,478
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$69,880$26,751
Accrued expenses95,83187,583
Income tax payable 182,945140,019
Current portion of lease liability22,07919,279
Current portion of notes payable 1,9891,966
Current contingent consideration liability28,8079,155
Liabilities held for sale23,04518,472
Other current liabilities12,22912,171
Total current liabilities436,805315,396
Deferred tax liability342,612299,333
Notes payable581,975434,123
Lease Liabilities321,973298,281
Non-controlling interest redemption liability56,42372,140
Contingent consideration liability 28,839
Other long term liability6,6085,876
Total liabilities1,746,3961,453,988
Shareholders’ equity:
Share capital2,238,2412,225,940
Treasury shares(5,208)(5,208)
Reserves(166,140)(162,085)
Accumulated other comprehensive income (deficit)(10,341)(9,996)
Accumulated deficit(311,380)(291,395)
Redeemable non-controlling interest(56,423)(72,140)
Total Curaleaf Holdings, Inc. shareholders’ equity1,688,7491,685,116
Non-controlling interest   116,789123,374
Total shareholders’ equity1,805,5381,808,490
Total liabilities and shareholders’ equity$3,551,934$3,262,478
Consolidated Statements of Profits and Losses (Unaudited)
($ thousands, except for share and per share amounts)
Three Months Ended
March 31,
20222021
(As Restated)
Revenue:
Retail and wholesale revenue$311,821$259,883
Management fee income1,253437
Total revenue313,074260,320
Cost of goods sold158,204131,853
Gross profit before impact of biological assets154,870128,467
Realized fair value amounts included in inventory sold(105,178)(68,914)
Unrealized fair value gain on growth of biological assets129,35281,261
Gross profit179,044140,814
Operating expenses:
Selling, general and administrative99,76080,090
Share-based compensation5,0934,907
Depreciation and amortization30,45919,719
Total operating expenses135,312104,716
Income (Loss) from operations43,73236,098
Other income (expense):
Interest income5988
Interest expense(13,900)(12,151)
Interest expense related to lease liabilities(9,949)(8,560)
Other income (expense)1,443415
Total other income (expense), net(22,347)(20,208)
Income before provision for income taxes21,38515,890
Income tax benefit (expense)(43,142)(30,708)
Net loss(21,757)(14,818)
Less: Net income (loss) attributable to non-controlling interest(1,772)
Net loss attributable to Curaleaf Holdings, Inc.$(19,985)$(14,818)
Loss per share attributable to Curaleaf Holdings, Inc. – basic and diluted$(0.03)$(0.02)
Weighted average common shares outstanding – basic and diluted708,897,273682,041,420
Consolidated Statements of Cash Flows (Unaudited)
($ thousands, except for share and per share amounts)
Three Months Ended
March 31,
20222021
(As Restated)
Cash flows from operating activities:
Net loss$(21,757)(14,818)
Adjustments to reconcile loss to net cash provided (used) in operating activities:
Depreciation and amortization40,84127,761
Share-based compensation5,0934,907
Non-cash interest expense12,5109,655
Unrealized gain on changes in fair value of biological assets(129,352)(81,261)
Realized fair value amounts included in inventory sold105,17868,914
Impairment loss248
(Gain)/loss on sale of property, plant and equipment and investment(872)13
Deferred taxes9(3,435)
Changes in operating assets and liabilities
Accounts receivable318(3,881)
Biological assets12,06012,439
Inventories(40,487)(41,095)
Prepaid expenses and other current assets(9,105)(15,862)
Other assets3,5815,990
Accounts payable35,755(296)
Income taxes payable43,85733,077
Accrued expenses(430)(8,091)
Net cash provided by (used in) operating activities57,447(5,983)
Cash flows from investing activities:
Purchases of property, plant and equipment, net(29,954)(31,425)
Cash acquired from acquisitions18,867
Payments made on completion on acquisitions(86,776)
Amounts advanced for notes receivable, net of payments received1,269(4)
Net cash used in investing activities(96,594)(31,429)
Cash flows from financing activities:
Cash received from financing agreement49,930
Proceeds from sale leaseback2,419
Debt issuance costs(681)
Lease liability payments(17,081)(13,071)
Principal payments on notes payable(100)(2,332)
Exercise of stock options4631,627
Issuance of common shares, net of issuance costs240,569
Net cash provided by financing activities(16,718)278,461
Net change in cash(55,865)241,049
Cash at beginning of period299,32973,542
Effect of exchange rate on cash(866)
Cash at end of period$242,598$314,591


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