Forget Aurora Cannabis, Curaleaf Is a Better Marijuana Stock

I wonder why there is so much hype around the Canadian pot company Aurora Cannabis (NYSE:ACB) when it has time and again failed to meet investors’ expectations…

Aurora Cannabis might be a popular pot stock among investors, but if you look around, U.S. cannabis stocks hold much greater potential. One such company is Massachusetts-based Curaleaf Holdings (OTC:CURLF). While most of the Canadian players continued struggling in 2020, Curaleaf had a spectacular year. Aurora’s stock dipped 60% over the past year, while Curaleaf’s stock has soared 103%. Meanwhile, the industry benchmark, the Horizons Marijuana Life Sciences ETFis down 4% over the same period.

Curaleaf’s revenue grew threefold in all of its quarters this year along with consistent positive earnings before income, taxes, depreciation, and amortization (EBITDA). The company claims to be the largest cannabis company in the U.S., which is evident from its market presence in 23 states. Let’s take a look at its progress this year and why it could be a better pick for investors eyeing some long-term gains.

Focusing on expansion has taken it closer to profitability

At the start of the year, when Curaleaf reported its fourth-quarter 2019 financial results, it had only 54 dispensaries across 17 U.S. states. It now has a total of 96 dispensaries across 23 states. Amid the pandemic, when most smaller cannabis companies struggled to survive, Curaleaf was expanding. And all this expansion helped grow its revenue. Curalleaf reported triple-digit revenue growth in all three quarters of fiscal 2020.

In its recent third quarter ended Sept. 30, total revenue grew a stunning 195% year over year to $182.4 million. Both its retail and wholesale segments saw dramatic growth. Retail saw an outstanding jump of 206.5% to $135.3 million, while the wholesale segment sales increased from $6.5 million in the year-ago quarter to $45 million in Q3 2020.

The top-line growth contributed to positive EBITDA again in Q3. The company also saw quite a noticeable jump in EBITDA from $10.4 million in Q3 2019 to $42 million.

Though the company isn’t profitable yet, if revenue and EBITDA keep growing at this rate, there is a possibility the company could…

Continue reading at THE MOTLEY FOOL

 

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