Curaleaf stock is showing immense selling pressure after Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF) reported lower-than-expected revenue for the first quarter.
Massachusetts based cannabis company Curaleaf Holdings has grown into one of the biggest players in the industry over the past year or so and much of that is due to the important strides it has made as a CBD operator.
Revenue Increases by 288%
Curaleaf said that revenue rose to $35.3 million, which reflected a year-on-year rise of a whopping 288%, while the rise from the previous quarter was 10%. Analysts were projecting the company to report revenue of $37.5 million.
The GAAP net loss came in at $10.9 million and reflected a loss of 2 cents a share, which was at par with analysts’ estimates. In Q1 2018, the same metric stood at $3.9 million with a per-share loss of $0.01. However, the EBITDA loss widened to $3.7 million in the quarter as opposed to the loss of $2 million in the year-ago period.
The reason behind Curaleaf Holdings’ strong revenue growth in the quarter is primarily due to its improving sales in both the wholesale cannabis business as well as in the retail business.
Curaleaf stock is one of the biggest losing cannabis stocks today, currently trading lower by 7% at $8.40 on the OTC market. CURA stock is down 6.70% and now selling at $11.35 CAD on the CSE.
Growth through Acquisitions
The acquisitions that Curaleaf made last year finally bore fruit, and in addition to that, the dispensaries in New York and Florida also boosted revenue in the quarter. Some of the acquisitions include Eureka in California and the Emerald Dispensary in Arizona.
The bottom line took a hit due to noncash depreciation amounting to $5 million, while net interest expenses rose to $4 million during the period. Curaleaf has made a range of acquisitions, and in the future, it needs to be seen how the company manages to integrate all of those into its business.
Curaleaf stock has performed well and gained as much as 90% over the course of 2019 so far.
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