Curaleaf stock is trading lower on Monday after Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF) announced the acquisition of BlueKudu for an undisclosed amount.
The company announced today that it is all set to acquire BlueKudu, which is involved in manufacturing edibles. The financial details of the deal remain undisclosed at this point. BlueKudu, which is based out of Colorado, uses high-quality ingredients and a special extraction process that produces cleaner oil. The oil is then used to produce high-quality cannabis products. The company manufactures gluten-free and vegan products as well.
BlueKudu was established in 2011 and has emerged as one of the better companies in the industry. Its products are available at as many as 200 locations, so it could prove to be a great acquisition for Curaleaf and beneficial for Curaleaf stock in the long run.
Colorado is currently the second biggest legal cannabis market in the United States, and in 2019, total sales in the state hit as much as $1.7 billion. The strong brand that has been created by BlueKudu could help Curaleaf Holdings in making major inroads into the Colorado market and boost its revenue.
Curaleaf Stock Outperformed Recently
Over the past few months, Curaleaf has been among the standout performers in the cannabis space. Even though the sector continues to struggle due to a variety of issues, Curaleaf has managed to go against the grain, and over the past four months, it has gained as much as 15%.
The primary trigger behind the rally came about in November when the company released its third-quarter financial results. Curaleaf generated $61.8 million, which proved to be a record, and the company also generated positive EBITDA of $9 million.
Losses for the quarter stood at $7.4 million, which is in manageable proportions. Considering the struggles of most cannabis companies, Curaleaf Holdings managed to buck the trend quite impressively.
At the time of writing, Curaleaf stock is down by 2.25% at C$6.96.
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