Curaleaf Reports Third Quarter 2022 Results

Third Quarter 2022 Revenue of $340 Million, an increase of 1% sequentially and 7% YoY

Third Quarter 2022 Adjusted EBITDA(1) of $84 Million, an increase of 18% YoY 

Generated $60 Million of Positive Operating Cash Flow in the Third Quarter and $71 Million in the First Nine Months of 2022

WAKEFIELD, Mass., Nov. 7, 2022 /PRNewswire/ — 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 third quarter ended September 30, 2022. All financial information is provided in U.S. dollars unless otherwise indicated.

Third Quarter 2022 Financial Highlights (Unaudited)($ thousands) 
($ thousands, except per share amounts)
Three months ended
September 30, 2022June 30, 2022September 30, 2021
Total Revenue$339,728$337,553$317,125
Gross profit before impact 
of biological assets
Gross margin before impact 
of biological assets
49 %52 %46 %
Adjusted EBITDA(1)(2)84,04486,17771,363
Net loss attributable to Curaleaf 
Holdings Inc.
Net loss per share – basic 
and diluted
(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 “Adjusted EBITDA” below (pg. 4) for reconciliations of Non-IFRS measures to the most directly comparable IFRS measures.
Earnings Call: Monday, November 7, 2022, at 5:00 P.M. ETConference ID # is 10171942Replay ID # is 9958653 
U.S. Callers: +1-844-512-2926U.S. Replay: +1-877-344-7529
International Callers: +1-412-317-6300 International Replay (Toll): +1-412-317-0088
Canadian Callers: +1-416-639-5883Canadian Replay: +1-855-669-9658
The teleconference will be rebroadcasted starting at 7:00 P.M. ETon November 7, 2022 and will end at 7:00 P.M. ET on November 14, 2022

Boris Jordan, Founder and Executive Chairman of Curaleaf, commented, “Our record third quarter was punctuated by the close of our landmark acquisition of a majority stake in Four20 Pharma. Since quarter end, we also closed on the  Tryke  acquisition one I expect will further strengthen our position in Arizona, Nevada, and Utah. Despite unexpected revenue impacts in Florida and New Jersey, our revenue grew 1% sequentially, gross margin before the impact of biological assets was 49% and adjusted EBITDA was 25%. We generated $60 million in operating cash flow during the quarter, ending with $198 million in cash on the balance sheet. The fundamentals of our business remain solid, our early advantage in Europe is taking shape and we are preparing for the year ahead by looking closely at operational efficiencies and optimizing our current assets.” 

Matt Darin, Chief Executive Officer of Curaleaf, stated, “In the third quarter we proved once again that Curaleaf’s diverse geographic and channel revenue mix is a key distinguishing factor driving our performance, one that allows us to withstand regional challenges and still deliver on revenue targets. I’m pleased to report that we posted our 19th quarter of consecutive retail growth, a 7% quarter-over-quarter growth in transactions, and we’re currently on pace to increase new product revenue 75% year-over-year. With a strategic focus on cost reduction, cultivation productivity and flower strain diversity, R&D, and technology investments, we delivered another record quarter with ample runway for continued success.”

Third Quarter Operating Highlights

  • Added two net new retail dispensaries in PA and Citrus Park, FL closing the quarter with 137 total locations, and serviced over 2,000 wholesale partner accounts.
  • Acquired a 55% stake in Four20 Pharma GmbH, a fully EU-GMP & GDP licensed German producer and distributor of medical cannabis, with a strategic pathway to acquire complete control of Four20 Pharma after two years of the commencement of adult-use in Germany.
  • Launched Plant Precision, a curated collection of edibles and a topical gel designed to target specific wellness categories.
  • Launched “The Farmer’s Select” program, an ongoing series of limited-edition collaborations with licensed legacy farmers and diverse operators in California.
  • Began expansion of Grassroots into new states, including the introduction of Infused Pre-rolls in California.

Post Third Quarter Operating Highlights

  • Added six new retail dispensaries across Arizona, Nevada and Florida and closed one in Colorado bringing total current store count to 142.
  • Completed license transfer in IL to Deerfield location and commenced adult use sales
  • Completed the acquisition of Tryke Companies, a privately held vertically integrated, multi-state cannabis operator with retail dispensaries in Nevada and Arizona, and an extensive portfolio of processing licenses with 65,000 square feet of total canopy cultivation with capacity to expand to 80,000 square feet over the next three years.
  • Commenced adult-use sales at Curaleaf Bordentown, New Jersey location, the Company’s third and final location to sell adult-use cannabis in the Garden State.
  • Launched Find, a cannabis flower brand designed to provide consumers with high quality cannabis flower at an accessible price point. Now available in Massachusetts, Find will expand to eight additional states across the country.
  • Launched new holiday flavors for Endless Coast and X-bites product lines.
Financial Results for the Third Quarter Ended September 30, 2022
Revenue (Unaudited)($ thousands)
Three months ended
September 30, 2022June 30, 2022September 30, 2021
Retail revenue$259,652$251,920$224,543
Wholesale revenue78,90384,40392,041
Management fee income1,1731,230541
Total Revenue$339,728$337,553$317,125
Number of retail stores137135109
Wholesale accounts2,0262,2002,100

Total revenue increased by 7% to $340 million during the third quarter of 2022, compared to $317 million in the third quarter of 2021. The Company’s year-over-year revenue growth primarily reflects continued growth driven by new retail store openings and commencement of adult-use in New Jersey, the acquisition of Bloom Dispensaries, the addition of new wholesale partner accounts, product launches, and the expansion of cultivation and production facilities. 

Retail revenue increased by 16% to $260 million during the third quarter of 2022, compared to $225 million in the third quarter of 2021, representing 76% of total revenue. Growth in retail revenue was primarily due to strong growth across Curaleaf’s footprint and the opening of 28 new stores over the year, namely in Arizona (including the acquisition of Bloom Dispensaries), Florida, Maine, and Pennsylvania and the commencement of adult-use in New Jersey.

Wholesale revenue decreased 14% to $79 million during the third quarter of 2022, compared to $92 million in the third quarter of 2021, representing 23% of total revenue. Contraction in wholesale revenue during the quarter was largely due to continued rationalization of the Company’s wholesale business in lower margin states. 

Gross profit excluding the impact of biological assets was $165 million for the third quarter of 2022, compared to $145 million in the third quarter of 2021. Gross profit margin excluding the impact of biological assets reached 48.5%, compared to 45.7% in the third quarter of 2021 largely resulting from the increase in vertically integrated products sold in our dispensaries and the mix of revenue from higher margin states.

Net Income / (Loss) (Unaudited)($ thousands)
Three months ended
September 30, 2022June 30, 2022September 30, 2021
Total Revenue$339,728$337,553$317,125
Gross profit152,999167,996182,734
Income from operations11,42223,36442,381
Total other expense, net(24,340)(6,517)(38,955)
Income tax expense(41,777)(45,066)(60,313)
Net loss(54,695)(28,219)(56,887)
Less: Net (loss) income attributable to non-controlling interest(3,220)117(2,363)
Net loss attributable to Curaleaf Holdings, Inc.$(51,475)$(28,336)$(54,524)

For the third quarter of 2022, net loss attributable to Curaleaf Holdings, Inc. was $51 million, compared to a net loss of $55 million in the third quarter of 2021. The decrease in net loss was due to higher revenues and corresponding expense leverage partially offset by a decrease in gross profit due to an increase in unrealized fair value gain on growth of biological assets.

Adjusted EBITDA (Unaudited)($ thousands)
Three months ended
September 30, 2022June 30, 2022September 30, 2021
Net (loss) income$(54,695)$(28,219)$(56,887)
Interest expense, net26,55625,09925,054
Income tax expense41,77745,06660,313
Depreciation and amortization (1)43,93342,50634,739
Share-based compensation6,3526,03913,180
Other (income) expense(2,216)(18,582)13,900
Change in fair value of biological assets11,8067,888(37,825)
Other add-backs (2)10,5316,38018,889
Adjusted EBITDA (3)$84,044$86,177$71,363
Adjusted EBITDA Margin (3)24.7 %25.5 %22.5 %
(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 $84 million for the third quarter of 2022, compared to $71 million for the third quarter of 2021. The year-over-year increase in adjusted EBITDA was primarily driven by solid revenue growth, along with an improvement in gross profit before the impact of biological assets combined with operating expense leverage. The year-over-year increase in Adjusted EBITDA margin reflects an increase in gross margin before the impact of biological assets due to a higher mix of sales from higher margin retails sales and SG&A leverage on the higher sales base. 

Balance Sheet and Cash Flow

As of September 30, 2022, the Company had $198 million of cash and $599 million of outstanding debt net of unamortized debt discounts. Approximately $433 million of the outstanding debt, net of unamortized debt discounts, are senior secured notes which bear a fixed interest rate of 8.00% per annum and are not due until December 2026.

During the first nine months of 2022, Curaleaf invested $99 million net in capital expenditures mostly attributable to cultivation, processing, and retail sites development activities. The Company expects to invest approximately $125 million in capital expenditures for the full year 2022.

Shares Outstanding

As of September 30, 2022 and June 30, 2022, the Company’s weighted average subordinate voting shares outstanding amounted to 709,802,875 and 709,434,324  shares, respectively.

As of September 30, 2022 and June 30, 2022, the Company’s issued and outstanding subordinate voting shares plus multiple voting shares amounted to 710,715,124 and 710,136,421 shares, respectively.


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 and nine months ended September 30, 2021, was a positive $2.4 millionand $7.2 million, respectively, 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. National Instrument 52-112 respecting Non-IFRS and Other Financial Measures Disclosure prescribes disclosure requirements that apply to the following types of measures used by Curaleaf: (i) non-IFRS financial measures; (ii) non-IFRS ratios; (iii) total of segments measures; (iv) capital management measures; and (v) supplemental financial measures. Curaleaf refers in this earning release to certain Non-IFRS financial measures and ratios such as “Adjusted EBITDA”, and “Adjusted EBITDA Margin”. Management believes that these non-IFRS and other financial measures provide useful information to investors regarding Curaleaf’s financial condition and results of operations. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers.  These measures are presented as supplemental information and in addition to the financial measures and ratios that are calculated and presented in accordance with IFRS.

“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. The  Company  believes  Adjusted  EBITDA  provides  improved  continuity  with  respect  to  the  comparison  of  our operating performance over a period of time.

“Adjusted EBITDA Margin” is a percentage representing  the Adjusted EBITDA divided by total revenue. We use Adjusted EBITDA Margin to facilitate a comparison of our operating performance on a consistent basis from period to period and to provide for a more complete understanding of factors and trends affecting our business.

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 table provided in this press release contained in the section “Adjusted EBITDA” (pg. 4) provides reconciliations of Non-IFRS measures to the most directly comparable IFRS measures.

Consolidated Statements of Financial Position ($ thousands) 
As of
September 30, 2022December 31, 2021
Assets Audited 
Current assets:
Cash and cash equivalents$197,681$299,329
Accounts receivable, net62,47264,570
Inventories, net438,014391,195
Biological assets80,96578,600
Assets held for sale111,00080,583
Prepaid expenses and other current assets31,59535,667
Current portion of notes receivable2,315
Total current assets921,727952,259
Deferred tax asset3,4672,593
Notes receivable842
Property, plant and equipment, net418,190379,720
Right-of-use assets, net356,652285,111
Intangible assets, net1,151,3751,010,008
Other assets18,94822,048
Total assets$3,547,368$3,262,478
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable$78,739$26,751
Accrued expenses95,34187,583
Income tax payable167,269140,019
Current portion of lease liability24,15319,279
Current portion of notes payable1,9401,966
Current contingent consideration liability23,4829,155
Liabilities held for sale15,82618,472
Other current liabilities30,16812,171
Total current liabilities436,918315,396
Deferred tax liability332,305299,333
Notes payable597,182434,123
Lease liability400,397298,281
Non-controlling interest redemption liability58,23972,140
Contingent consideration liability 3,79928,839
Other long term liability9,8915,876
Total liabilities1,838,7311,453,988
Shareholders’ equity:
Share capital2,239,4272,225,940
Treasury shares(5,208)(5,208)
Accumulated other comprehensive income(32,955)(9,996)
Accumulated deficit(391,106)(291,395)
Redeemable non-controlling interest contingency(58,239)(72,140)
Total Curaleaf Holdings, Inc. shareholders’ equity1,590,6181,685,116
Non-controlling interest118,019123,374
Total shareholders’ equity1,708,6371,808,490
Total liabilities and shareholders’ equity$3,547,368$3,262,478
Consolidated Statements of Profits and Losses (Unaudited)($ thousands, except for share and per share amounts)
Three months ended September 30, Nine months ended September 30, 
Retail and wholesale revenues$338,555$316,584$986,699$887,961
Management fee income1,1735413,6561,689
Total revenues339,728317,125990,355889,650
Cost of goods sold174,923172,216494,796461,036
Gross profit before impact of biological assets164,805144,909495,559428,614
Realized fair value amounts included in inventory sold(120,731)(112,691)(349,322)(263,408)
Unrealized fair value gain on growth of biological assets108,925150,516353,802342,837
Gross profit152,999182,734500,039508,043
Operating expenses:
Selling, general and administrative103,931101,800311,207269,849
Share-based compensation6,35213,18017,48436,457
Depreciation and amortization31,29425,37392,83068,979
Total operating expenses141,577140,353421,521375,285
Income from operations11,42242,38178,518132,758
Other income (expense):
Interest income32129101495
Interest expense(15,449)(15,659)(44,454)(40,079)
Interest expense related to lease liabilities(11,139)(9,524)(31,092)(27,423)
Other income (expense), net2,216(13,901)22,241(11,182)
Total other expense, net(24,340)(38,955)(53,204)(78,189)
(Loss) income before provision for income taxes(12,918)3,42625,31454,569
Income tax expense (41,777)(60,313)(129,985)(133,645)
Net loss(54,695)(56,887)(104,671)(79,076)
Less: Net loss attributable to non-controlling interest(3,220)(2,363)(4,875)(4,887)
Net loss attributable to Curaleaf Holdings, Inc.$(51,475)$(54,524)$(99,796)$(74,189)
Loss per share attributable to Curaleaf Holdings, Inc. – basic and diluted$(0.07)$(0.08)$(0.14)$(0.11)
Weighted average common shares outstanding – basic and diluted709,638,533703,545,262709,802,875695,830,455
Consolidated Statements of Cash Flows (Unaudited)($ thousands, except for share and per share amounts)
Nine months ended September 30, 
(As Restated)
Cash flows from operating activities:
Net loss$(104,671)$(79,076)
Adjustments to reconcile loss to net cash provided (used) in operating activities:
Depreciation and amortization127,46795,157
Share-based compensation17,48436,457
Non-cash interest expense39,74832,872
Unrealized gain on changes in fair value of biological assets(353,802)(342,837)
Realized fair value amounts included in inventory sold349,322263,408
Impairment loss6,685
(Gain) loss on retirement of asset(2,479)583
Gain on investment(15,000)
Deferred taxes(18,606)(1,824)
Changes in operating assets and liabilities:
Accounts receivable(115)(2,283)
Biological assets1,11550,309
Prepaid expenses and other current assets(5,105)(15,022)
Other assets2,3634,408
Accounts payable48,626(1,895)
Income taxes payable28,11251,769
Accrued expenses(1,561)15,277
Net cash provided by (used in) operating activities71,471(27,445)
Cash flows from investing activities:
Purchases of property, plant and equipment, net(99,196)(117,361)
Proceeds from sale of entity10,57729,828
Acquisition related cash payments, net of cash acquired(85,733)5,079
Amounts advanced for notes receivable, net of payments received2,3151,587
Net cash used in investing activities(172,037)(80,867)
Cash flows from financing activities:
Cash received from financing agreement57,196
Proceeds from sale leaseback45,53723,153
Debt issuance costs(681)
Minority interest buyouts(1,190)
Lease liability payments(41,202)(40,197)
Proceeds from minority interest investment in Curaleaf International84,795
Principal payments on notes payable(198)(6,085)
Acquisition escrow shares returned and retired(7,730)
Exercise of stock options(875)4,061
Issuance of common shares, net of issuance costs240,572
Net cash provided by financing activities3,262353,894
Net change in cash(97,304)245,582
Cash at beginning of period299,32973,542
Effect of exchange rate on cash(4,344)(1,935)
Cash at end of period$197,681$317,189
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