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Is Curaleaf Still a Top Marijuana Stock to Buy?

By Eric Volkman - Mar 29, 2021 at 2:00PM

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The company is growing at an admirable clip, but it's still posting bottom-line losses.

Curaleaf's (CURLF 7.38%) latest set of quarterly figures engendered a mixed reaction on the market. Some investors and pundits were impressed by the retail-focused company's performance. Others, not so much.

In this segment from Motley Fool Live, recorded on March 12, longtime Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina discuss whether the stock should still be considered one of the more attractive marijuana titles for investors post-earnings.



Corinne Cardina: let's talk about some multi-state operators (MSOs). So Curaleaf actually reported earnings this week. So one of the first kind of U.S. leaders to tell us how things have been going, and you wrote an article on it so I'm going to post that in the chat.

Can you give us the highlights on Curaleaf's earnings and what you think about this stock?

Eric Volkman: OK. Well, let me call up my article because that was a while ago and my memory is fading.

Cardina: I tossed in the chat.

Volkman: Oh, OK. Yeah, Curaleaf. We're talking about the retail sector. These guys are, like, leading the charge on retail and their idea, they're the largest retail company and they're one of the big pot stocks consequently. So their idea is scale, they're all about scale. Getting bigger, having a presence [in] every imaginable market and potential market.

Yeah, I mean, people liked their performance, they did well. They had record-high revenue which, let's put it asterisk next to that, they're always posting record-high revenue. It was a little bit over $230 million for the quarter and that's up 26% over the previous quarter and it's over 200% higher year over year.

So you have a combination with Curaleaf. You have the fact that they're constantly building out their networks, constantly adding stores, constantly putting stores on stream. And you're also having higher demand as most of us know as marijuana stock investors during the pandemic, demand has risen because people are at home and instead of, watching the same TV show for the 15th time or looking at the walls or, talking to a family member, they want to have some other kind of outlet. Marijuana feeds into that.

So the better operators, I would say Curaleaf being one, have taken advantage of that. I think a lot of them have adjusted fairly well to the pandemic, they've enhanced their delivery options, they've enhanced their pickup options.

These aren't such a factor anymore as the pandemic is fading. People are getting less shy about going to stores, but Curaleaf because of its own strategy and its own aggressiveness, I would say, and the kind of natural demand from their customer base, they have some pretty good momentum, some pretty good tailwinds behind them.

They're still loss-making, it's important for us to remember that. Their loss, unfortunately Q3, it was deeper than analysts had anticipated. Not by a lot, not by a worrying amount, but if you buy into the sector and if you're considering a stock like Curaleaf, you do need to be aware that they're still in the red. Their net loss was a little over $35 million.

Again, not a big tragedy, there have been much worse numbers with peers, with themselves. That's not bad, that's not worrying but again, [it's] something to bear in mind with this company.

Still, they're on the way up and they're always in the conversation when you're talking about marijuana retail -- and publicly traded U.S. marijuana stocks in general.

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