Multi-state operators (MSOs) are cannabis companies that span across multiple states in the US. MSOs have outpaced their Canadian counterparts in the last couple of years…
While Canadian pot producers are grappling with negative profit margins and tepid revenue growth, marijuana companies in the U.S. are racing towards profitability driven by the recent wave of cannabis legalization in the country and an expanding addressable market.
In this article, I am going to take a look at two MSOs, Curaleaf (CURLF – Get Rating) and Cresco Labs (CRLBF – Get Rating), to determine which is a better stock to buy right now.
Curaleaf stock is up 140% since 2019
Curaleaf has a presence in 23 states in the U.S. with more than 100 dispensaries. It recently announced a collaboration with Rolling Stone which should allow Curaleaf to improve the brand positioning of its Select group of products. Further, last month it also announced the acquisition of Los Suenos for $67 million which will help the company gain traction in Colorado.
In the first quarter of 2021, Curaleaf reported sales of $260 million with an adjusted EBITDA of $63 million. It raised $300 million in order to target growth markets such as New York and New Jersey as the states just legalized marijuana for recreational use.
Further, Curaleaf aims to launch medical marijuana products in Germany which is the largest market in Europe. Curaleaf has already established a presence in the region with the acquisition of Europe-based marijuana company Emmac Life Sciences.
Curaleaf’s sales in 2020 stood at $626.63 million which was an increase of 183% year over year compared to sales of $221 million in 2019. In the trailing 12-month period, Curaleaf sales were close to $800 million, indicating it’s on track to post $1 billion in annual sales in 2021.
Curaleaf stock has gained 140% since the start of 2019 valuing it at a market cap of $9.8 billion.
Cresco Labs stock is down 36% from record highs
Cresco Labs is another growth stock that should be on the radar of cannabis investors. In the first quarter of 2021, Cresco Labs increased sales by 169% year over year to $178.4 million, beating consensus revenue estimates of $171 million. It posted a GAAP loss of $24 million which was lower than its year ago loss of $35.5 million. The company’s adjusted EBITDA rose to $35 million, reflecting a 17% increase on a sequential basis.
Cresco CEO Charles Bachtell claimed the company…
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