Curaleaf Earnings + Call Notes
Global canna leader reports Q226 results.
$340.1M Revs; est. $332.8M
$70.1M AEBITDA; est. $66.3M
$169.9M GP; est. $161.6M
50% GM; est. 48.6%
$4.2M OI; est. $5M
$12.5M NI; est. ($42.3M)
$0.05 EPS; est. ($0.16)
Second quarter 2026 net revenue of $340 million
Second quarter 2026 International revenue of $51 million
Second quarter 2026 gross profit margin of 50%
Second quarter net income of $12 million
Second quarter adjusted EBITDA of $70 million
Management Commentary
“Our second quarter results reinforce that our ‘Built for Growth’ strategy, a disciplined framework focused on customer centricity, brand building, and operational excellence is gaining traction across the business.
Second quarter revenue of $340 million grew 10% compared to last year, bolstered by our domestic and international segments that grew 7% and 26%, respectively.
Our U.S. business has clearly regained momentum. This was our second consecutive quarter of domestic year-over-year growth, and an important proof point that our reset is taking hold in a durable way.
Gross margin was 50% and adjusted EBITDA was $70 million, representing a 21% margin. Net income from continuing operations was $12.5 million and we ended the quarter with $107 million in cash on the balance sheet.
We have a strong, cohesive team aligned around one common goal: making Curaleaf the global leader in cannabis. While there is still work ahead and significant opportunity to capture, we are firmly on the right path – with the team, strategy, and operating discipline to lead the next phase of cannabis.”
Boris Jordan, CEO, Curaleaf
Call Notes
2 year anniversary w/ Boris as CEO.
Delivered meaningful results on operational strategy.
Improved cultivation, quality, efficiency, and w/ a more focused org.
Moved from stabilization to acceleration.
Goal to be global leader in cannabis ; firmly on the right path.
Regulatory tailwinds and an improved macro backdrop.
Domestic and intl segments grew 7% and 26% YoY, respectively.
50% GM.
$70m adj EBITDA, 21% margin ; 140bps drag from intl.
$12.5m N/I vs. ($48m) in YoY period.
US business gained momentum.
^ 2nd consecutive quarter of YoY growth.
Achieved growth while expanding gross margin.
Higher quality flower (avging 31% potency), improved cultivation yields, and improved assortment at market level.
US platform now scaling w/ greater consistency and discipline.
Business should be boosted by hemp loophole closing.
Looking at GA TX VA for growth.
Potential for SC and Wisconsin to advance medical programs in ‘27.
Potential for selective acquisitions in new market expansion.
Intl revs up 26% YoY, driven by UK GRMY POL.
UK growth driven by continued expansion in clinic patient counts, and wholesale.
Launched Huala value brand in UK.
Closely monitoring price compression in Germany, particularly at bottom end of pricing spectrum.
Completed buyout of 45% minority interest in 4/20 Pharma, now 100% ownership.
Encouraged by early signs of German regulators taking proactive stance towards non-EUGMP product, too much lower quality/non-compliant product entered EU through channels circumventing regulation.
Believe Spain, France, Turkey represent 3 most important new medical opportunities in EU, together represent over 200m people.
Spain, 48m population market, CURLF first to receive approval for 2 products last month, expect to ship imminently.
In France, 69m population, CURLF working to secure relationship w/ France-focused Pharma co.
Turkey, 87m population, final rules expected this year, w/ market launch next year.
CURLF INTL one of the most compelling growth platforms in global cannabis, and a distinct differentiator.
In many markets w/ coming years seeing increased adoption.
ALJ processes concluded July 15th.
Believe A/U could be rescheduled by year-end, possibly by mid-terms.
Rescheduling could lead to uplisting.
^ prepared to uplist the entire company once A/U made effective
Expect greater clarity on 280e taxes.
Longer term assessing a world where export and interstate commerce are permitted
Believe export could be ready in 18months, giving CURLF time to stand up EU GMP operations.
Interstate commerce could finalize, once infrastructure implemented by DEA, should take longer to materialize than export.
Believe inhalables/edibles should be removed from market once hemp shut down takes effect later this year.
Regulated industry already seeing benefits from hemp market wind downs.
^ Seeing pricing stabilization in ’27, could return to double digit industry growth.
If demand shifts faster than market can respond, could be tighter than market can supply, could cause pricing gains.
Seeing enforcement against illicit market activity in markets like OK CA ME.
Domestic business grew 7% YoY, 500bps acceleration QoQ.
^ OH UT NY FL MD all delivering double digit growth.
Retail compression remains a factor, rate of compression moderating in several markets.
Retail teams improving customer experience, assortment, and using data more effectively to match product and pricing to market demand.
^ Launched Spanish language experience on website, app, kiosk.
Brand building showing up in market share.
Brand portfolio continues to hold a top market share position.
^ Increasing relevance of brands across key markets.
Select #1 vape nation-wide.
Anthem infused prerolls #1 in IL and #5 across operating markets.
Operational excellence evident in Q2, over 10% increase in transactions vs. 3.9% decline in average unit retail pricing ; 4% YoY revenue growth at retail.
States w/ largest transaction volume gains were also CURLF’s strongest markets.
Opened 2 new dispensaries in FL during the quarter.
^ 73 stores in FL and 174 stores nationwide.
Wholesale branded sales up 28% YoY.
^ Reflects better cultivation output, improved quality.
Wholesale becoming a more powerful channel to expand share, improve brand visibility.
Continuing to take costs out of the system and redeploy resources towards high return opportunities.
Driving traffic, improving assortment, strengthening brand, staying disciplined on margin.
Domestic business exited quarter w/ momentum in 2H.
$340m revenue, up 5% QoQ, up 10% YoY.
OH, INTL, UT, NY, FL strength offset by declines in AZ IL.
$241m retail revs, up 5% YoY.
Total wholesale up to $96m or 21% of total revenue.
NY OH MD INTL showing sale growth.
$170m GP, 50% GM, up 170bps YoY.
GM growth driven by cult efficiency gains, labor control, higher vertical mix.
51% domestic GM.
Pricing initiatives in early stages, believe meaningful runway to improve price realization, drive optimized mix, drive additional margins.
Stronger capacity utilization in Spain.
$132m SG&A, up $20m YoY.
$115m core SG&A, up $15m YoY ; increase driven by higher bonus accruals, intl expansion, headcount growth, new store openings.
34% core SG&A margin, 200bps increase YoY.
Series of cost initiatives in 2H ’26 to drive cost leverage.
$70m Adj EBITDA, up 3% YoY.
21% aEBITDA margin, 140bps intl drag.
$12.5m net income, $0.05 EPS.
Income tax benefit of $38.8m.
280e only applies to A/U business going forward.
$7.4m in share buybacks during the quarter.
$107m cash/equivs.
$16m CAPEX.
$80m FY’26 CAPEX.
OPCF $29m, FCF $13m.
Expect operating cash to continue building in 2H.
Completed 1 for 3 reverse split.
Experiencing strong increase in traffic, driven by initiatives taken.
Low single digit revenue expected into Q3, $347m revenues.
Sourcing adequate product is one of largest issues in intl supply chain.
Stale product and inconsistency of product, delivered on time.
Looking at better ways to source supply in intl chain.
Diversifying supply to not rely on any one provider.
20% supplied internally, want to supply from 50-75% from internal facilities, expect to do that over next 6-12months.
Intl Vertical integration, reaching 50-75% vertical supply, will increase margins substantially in EU business.
Intl Vertical integration will allow ability to carry less inventory levels, cash conversion will come from 120 days to 60 days.
Companies are right sizing their inventory ; An aging inventory barrier for all states.
Continued proliferation of hemp and illicit product is impacting the market.
Competitors plant fully, CURLF only plants out for demand plans out 9-12mo.
^ CURLF would rather come up short product than long product.
Believe competitors are right-sizing their model to supply their own demand plans vs. planting out fully.
Hemp is everywhere, in every market, even in states w/o regulated cannabis programs.
Organic growth for industry next year could be 10-15% on the back of inhalable hemp shutdown.
A lot of chatter about hemp risk of extension, believe 0 risk of that extension beyond Dec 11 time table.
Think alcohol industry trying to get beverage across hemp regulation.
Do not anticipate inhalable products, based on convos w/ many senators, esp from Repub Senators.
Expect CF generation to expand in 2H.
Embarked over a substantial cost reduction program, will remove $35-40m in SG&A costs.
Believe will see pricing stabilization and maybe an increase in pricing next year.
Turning products faster through retail chain, reduces costs.
Believe you see continued expansion of margins vs. a decline.
If competitors continue to discount heavily, could impact margins.
Several OH factors that expanded growth, opened several new stores.
^ 1 store away from OH max, should open in Q4 (Oct).
As acquire an additional grow facility in OH, increasing capacity by 2x, was operating under small 25k sq ft canopy grow facility w/ no ability to expand that, now acquired a facility from Pharmacann.
Think OH shows you what kind of growth you can see once hemp is shut down.
Before hemp came into play, cannabis industry was expanding at almost 20% annual growth rate.
DEA now taking a position against illicit cannabis grows across the country.
Sights on GA TX for sure, looking at different ways to engage in those markets, hopefully would have news shortly.
Will be expanding existing facilities in Portugal and Canada.
Will be investing in additional capacity to supply international market.
Preparing to export out of the US.
Already expanding current intl export facilities.
US export is probably some time away, believe within 12 months.
Quality and assortment are important for Germany.
Many operators in Germany are brokers, buy cannabis around the globe, greenwash it (illegal process), then flip it into Germany market ; this has forced compression in German market.
Believe more rigorous enforcement from German operators, already happening in UK.
Believe hopefully in the fall, German moves towards eliminating greenwashing.
/end
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CB1 has a position and nothing contained herein should be considered advice.