In our newest Trade To Black Podcast, TDR Founder Shadd Dales and lead financial writer Benjamin A. Smith interview Curaleaf Holdings (CNSX: CURA) (OTCMKTS: CURLF) Co-Founder and Executive Chairman, Boris Jordan. On the agenda: reaction to the recent midterms adult-use cannabis ballots, third-quarter financial results, Germany cannabis, SAFE banking odds following a likely Democrat Senate majority win, and more.
Regarding third quarter financial results released on November 7, Curaleaf Holdings reported topline revenue of $337.55 million in total revenue—a little less than one percent sequentially over Q2 2022. The revenue increase was a second consecutive sequential increase following a dip in the Q1 2022. Gross margins on cannabis sales fell close to 250 basis points, however remain higher on a year-over-year basis.
Cash flow from operations was $71 million, although this was before accounting for income taxes payable—approximately $30 million of which was paid in October.
Of note, Curaleaf noted on the post-earnings conference call that its sizable capital expenditures (CAPEX) spending is due to be considerably reduced in 2023. For the full year in 2022, the company expects CAPEX to be approximately $125 million.
However, since most of their large-scale operation projects have already been built out domestically, Curaleaf expects capital expenditures in 2023 to be substantially below the 2022 levels. So much so that CAPEX could be reduced in “half”, which should give the company much more room to generate unemcumbered free cash flow.
Although the infrastructure buildout is largely complete, Curaleaf will add multiple touchpoints of operations in 2023 is states such as Connecticut and New York on the adult-use side. As well, with adult-use state cannabis ballot wins in Maryland and Missouri, the company will remain active building out new states that to fuel topline revenue growth in 2023.
To view our previous Trade To Black Podcast, click here.