Two of the biggest cannabis chains in the U.S. reported strong sales growth in their March quarters and continued to roll up new acquisitions.
Curaleaf Holdings (ticker: CURA.Canada or CURLF.OTC) reported Thurday night that it grew sales 17% from the December quarter, to reach March period sales of $41 million at stores that it owns or manages. Including the four companies Curaleaf is in the process of acquiring, March quarter sales would ave topped $75 million. That makes the Wakefield, Mass.-based chain the largest in the U.S. and one of the biggest in the world.
Curaleaf lost $10 million on those March revenues, but excluding noncash and one-time charges, its negative cash flow was $3.7 million. In Curaleaf’s earnings announcement, chief executive Joe Lusardi said the company’s pending merger with West Coast distributor Cura Partners will improve the combined business’s margins.
And on Friday morning, Harvest Health & Recreation (HARV.Canada or HRVSF.OTC) said its March quarter sales were $19 million, a 14% rise from its December quarter. The Tempe, Ariz.-based chain also has a number of acquisitions under way. Had those been complete, March sales would have been $51 million. Losses on the quarter were $20 million, which Harvest attributed to its growth initiatives. Excluding noncash charges, Harvest had $5 million in negative cash flow.
Read our recent cover story: You’d Have to Be High to Buy American Marijuana Stocks
One merger that’s particularly promising for Harvest is its combination with the Chicago firm Verano, given that the Illinois legislature may vote to legalize recreational marijuana on Friday. On a conference call Friday morning, Harvest President Steve Gutterman said Verano has been preparing for recreational pot sales for a long time.
Harvest Chief executive Steve White said Harvest will join with other cannabis companies in Arizona in collecting signatures there for a referendum on recreational pot. A 2016 legalization initiative failed, and White said he learned from that defeat. This year’s proponents are meeting with those who were opposed in 2016, he said, in an effort to draft language for the ballot initiative that might reduce opposition.
Write to Bill Alpert at william.alpert@barrons.com
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