At the fore of the new cannabis movement is Curaleaf Holdings (CSE:CURA) (OTC:CURLF), one of the leading names in the cannabis dispensary space in America.
Marijuana no longer holds the same taboo it once did. The drug is quickly being recognized as a mainstream consumer product, and the dispensary business is booming as a result. With that in mind, should investors know about Curaleaf?
Curaleaf Holdings: Is it an Opportunity?
With a market cap of $3.5 billion USD, Curaleaf operates an integrated network of medical and wellness cannabis facilities throughout the US. It holds the fort in 12 states with its 34 dispensaries and 12 cultivation sites.
It also helps that Curaleaf is expanding rapidly and its revenue growth is already on fire.
With total sales of $45.1 million in the first nine months of fiscal 2018 and gross profit of $27.7 million, Curaleaf is showing figures that most dispensaries can only dream of. These numbers represent a 289% year-over-year increase in total revenue.
It doesn't stop there; management is predicting revenue as high as $400 million for 2019. This will mean a free cash flow of $100 million.
It all sounds gravy for investors but don't expect a smooth ride. Curaleaf's bottom line is in red at present (though much of this can be attributed to operational costs and expansion) and there's ambiguity over the legality of cannabis outside of those already legal jurisdictions.
The dispensary business does not come without its risks and investors must navigate these. Firstly, there are the operational expenses associated with brick and mortar stores—that's a given. Then, there's also the inconsistency that comes with foot-fall.
Curaleaf in 2019
If you are a holder with patience, Curaleaf has done a lot to build a trusted brand name in high-growth regions such as Florida and California. It also comes with a solid record of sales growth.
And if the market prediction is correct, then spending on legal cannabis worldwide will hit $22.8 billion by 2020, with the recreational market accounting for 67% of that. You can see the potential here.
For $8.13 CAD on the CSE at present, CURA stock could be a bullish case.
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