The Big 4 U.S. Cannabis Producers Report Strong Q3 Results

Troubles in the Canadian Cannabis market left investors cautious on the sector going into 2020.  It has quickly become clear that U.S. Cannabis market is a more prospect for the time being.  The American medical market is experiencing strong growth, lead by the big 4 operators: Curaleaf, Green Thumb, Trulieve and Cresco Labs.  These companies released financial results this week – let’s take a glance at some of the numbers and implications:

Growth, Growth and More Growth

These 4 companies have generated significant revenue growth in the last four quarters, growing on average 118% year-over-year.  The U.S. Presidential election results will prove quite profitable for top U.S. operators (with right the infrastructure and business model) geared to take advantage of an ease in regulations and possible federal legalization during a Biden Presidency.

EBITA margins continue to grow as these companies’ scale, with Trulieve leading the group with an excellent margin of $67.5 million or 50% of revenue.

Trulieve opened nine stores in the third quarter, achieving their year-end goal of 68 stores nationwide.  Last week their Pennsylvania acquisitions closed; Capital 10x discussed their regional strategy with their CEO Kim Rivers recently.

Curaleaf had a managed revenue of $193.2 million, which grew 164% year-over-year, and acquired Grassroots creating the world’s largest cannabis Company by revenue.  Curaleaf also outperforms its peers on a Price-to-Sales Ratio basis.  Green Thumb’s total revenue for Q3 2020 was $157.1 million, up 131.1% from $68 million for the third quarter 2019, driven by growth from their Consumer-Packaged Goods and Retail business, focusing on Illinois and Pennsylvania.  Cresco Labs’ revenue for third quarter of 2020 was $153 million, an increase over $59 million or a 63% increase over their Q2 2020 revenue.  Their growth was mainly driven by an increase in harvests from expanded capacity in Illinois and Pennsylvania, with strong growth in California.

 

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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