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US drug maker Curaleaf Holdings Inc. on Monday reported a bigger-than-expected loss in the third quarter, amid what it called “unexpected profit impacts” in Florida and New Jersey.
Curaleaf CURLF,
reported a net loss of $54.7 million, or 7 cents a share, compared with a loss of $56.9 million in the same quarter last year, or 8 cents a share. Sales came in at $340 million, compared to $317 million in the year-ago quarter; sales were up just 1% from the previous quarter.
Analysts polled by FactSet had expected a loss of 3 cents a share on revenue of $337 million. Shares closed 3.4% lower on Monday.
Curaleaf – one of the largest drug manufacturers in the US, with a number of drugs and brands of operations in 22 states – has opened new stores in states such as Arizona, Florida and Pennsylvania in recent weeks. But the U.S. legal drug industry has been hit hard by falling weed prices, as illegal producers continue to grow and the market continues to suffer from lower profits, as it is being reconsidered. consumers to their shopping activities in a world of rising prices for basic things like groceries. and gasoline.
Ben Kovler, CEO of Curaleaf competitor Green Thumb Industries Inc. GTBIF,
Citing data from the BDSA, it recently told MarketWatch that US drug sales have increased by 3%, while sales of components have increased by 22%. The gap between revenue and the amount of goods sold – which implies lower prices – has made it harder for many government managers to manage their own costs.
For others: In the midst of inflation, one thing is getting cheaper – cannabis
Ahead of Curaleaf’s earnings, some analysts also said rising prices elsewhere could hurt the legal weed market.
“Based on our review of government-level retail data in the US, we found that in Q3/22, consumer purchases at retail level increased, on average, by ~1.2%. However, most markets have a higher concentration of MSO imports that have slipped down in many cases,” Canaccord analyst Matt Bottomley said in a statement last month.
“As the main focus in Q2, we believe that inflation will continue to be strong on consumer spending to grow as the cost of food, transportation and other types of unthinkable food and demand a larger share of the budget from consumers,” he continued.
Curaleaf said voters in five states are set to vote Tuesday on marijuana reform measures. Voters in Maryland and Arkansas will decide whether to legalize recreational activities. In Missouri, they will vote on a measure that could eliminate state restrictions on personal use. North Dakota and South Dakota will also vote on ratification measures.
Nineteen states allow the sale of recreational drugs. Most states have legalized marijuana for medical or recreational use.
Curaleaf’s stock is down 38% this year. By comparison, the S&P 500 SPX index,
down 20.9%.
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