Is Curaleaf Stock a Buy?

Multistate cannabis operator Curaleaf (OTC:CURLF) is among the largest players in the industry. Its aggressive growth strategy focuses on expansion and big acquisitions. Today, the company’s operations span 23 states and include 96 dispensaries. Curaleaf is a…

beast and offers investors a way to tap into the industry’s explosive growth.

But it’s not without risks, either. All that growth costs money and can be difficult to manage and integrate. The company continuously posts losses and burns through cash — which can be a quick way to run into trouble in the industry. Is Curaleaf an exciting growth stock to invest in, or could the company’s aggressive strategy be its undoing? Let’s take a look and see which scenario is more likely, and whether you should consider buying shares of Curaleaf today.

The company’s sales numbers are incredible

Curaleaf is an attractive buy for growth investors because that’s all the company does — grow. Over the past three quarters, its revenue of $396.4 million has more than doubled the $145.6 million reported during the prior-year period. In 2020, its acquisitions of Grassroots and Cura Partners (which owned the Select brand) were integral to its expansion efforts and growth, putting its operations in more states and helping to pad its top line in the process.

As impressive as its sales numbers are right now, for the third quarter (ending Sept. 30), Curaleaf calculated that its pro forma revenue was $215.3 million. (“Pro forma” revenue is a what-if scenario to show what results would look like if they included sales numbers from its acquisitions for the full period.) Extrapolating that over three quarters would put the company at well over $640 million in sales; over a year, that number would be about $860 million.

With sales numbers that strong, it’s easy to see why Curaleaf captivates growth investors. But that doesn’t mean all is well with the company…

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