John Schroyer
Massachusetts-based Curaleaf lost more than a third of a billion dollars in 2022. Chicago-based Green Thumb Industries, by contrast, made $12 million last year and $9 million in just its first quarter of 2023.
Despite that gulf between them, the tone of each of the multistate operators’ earnings calls held last week was remarkably similar in tone: bullish on the future of the cannabis industry.
Different Markets
Perhaps the biggest notable difference was that Curaleaf’s bullishness had just as much to do with its international footprint as its domestic U.S. operations.
In Germany, for instance, Executive Chairman Boris Jordan said Curaleaf expects its brand Four 20 – acquired just last fall – to double in size with expected reforms on the way that will give rise to nonprofit cannabis clubs. Curaleaf also has cannabis interests in the United Kingdom.
“Our European expansion is a big place where we’re going see a significant growth in ’24, ’25 and ’26,” Jordan said during Curaleaf’s earnings call on May 1. “The total market patient count could increase three to five times, putting us in a great position to rapidly increase Four 20’s already strong brand awareness.”
GTI leadership, meanwhile, conveyed that they’re content to keep grinding out profits in the U.S. with heads down, “playing the long game.”
“This is a marathon, not a sprint,” CEO Ben Kovler said during the company’s call on May 3.
Kovler went on to note that GTI plans to open 15 dispensaries this year across Florida, Minnesota, Nevada, Pennsylvania, and Virginia. The company’s national store count is already at 79.
Similar Approach
Where Jordan and Kovler overlapped was on the subject of acquisitions. While both said that they’ll remain open to good possibilities, they also hedged and said there’s a glut of distressed assets, which will make them both cautious when it comes to M&A.
“I wouldn’t look for massive transformational M&A. We know the difficulties of integration and what’s associated with that. So the bar remains very, very high,” Kovler said. “It’s not so attractive out there.”
Industry-wide for 2023, Jordan predicted, “consolidation is going to be a major, major theme,” and said Curaleaf will keep its options open.
“You won’t see Curaleaf running off and doing the historic type of deals we did, large transactions. You’re going to see us do tuck-in acquisitions at the right prices,” Jordan said. “We need to be very, very careful in doing transactions that are going to be good for our business.”
Outlook for Reform
Jordan, however, was noticeably pessimistic on the topic of U.S. cannabis reform. He noted Curaleaf’s participation in a lawsuit filed against the state of New York, called a recent dispute with New Jersey regulators over retail licenses a “capricious and vindictive” move, and said he’s done making predictions about marijuana reforms getting through Congress after the bitter defeat of the SAFE Banking Act in December.
“There is a lot of momentum in D.C. that finally get something done,” Jordan said, referring to the recent reintroduction of SAFE. “However, we are out of the business of predicting anything in Washington. We’ve learned our lesson.”
With that caveat, Jordan shared that “what I’m hearing is they’re trying to get (SAFE) out of the Senate by July, and into the House in September with a vote in the House of Representatives somewhere in the fourth quarter, and try to get a signature of the president going into the December. That’s the target.”
