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Curaleaf Reports $370M in Annual Losses, Still Pines for SAFE Banking
Published on May 8, 2023

Curaleaf lost about $370 million over the course of 2022, just before facing a series of regulatory setbacks in subsequent months, according to the company’s fourth quarter financial report which was finally released May 1. 

The total fourth quarter revenue was $352 million, an increase from the previous quarter's total of about $12.7 million. Despite that, the company's earnings before interest, taxes, depreciation and amortization dropped from $76.4 million to $73.2 million in the previous quarter. 

The company reported a net loss during the quarter of over $260 million, amounting to a per-share net loss of 36 cents. The net loss for the entirety of 2022 was $370.1 million, compared to $205.9 million in 2021.

The company had a total of $163 million in cash as of the first of the quarter, which is a significant drop from the $299.3 million Curaleaf had at the start of 2022. 


Curaleaf took on $475 million in additional debt with a loan that matures in 2026. That debt represents about one-fourth of the company’s total liabilities in 2022.  

"In December 2021, the company closed a private placement of Senior Secured Notes — 2026, for aggregate gross proceeds of $475 million to the company,” said Executive Chairman Boris Jordan in a May 1 investor call. “The notes bear interest on the unpaid principal amount at a rate of 8% per annum, compounded semi-annually and payable in arrears on June 15 and December 15 of each year during the term of the notes; the first of which will be June 15, 2022."

Curaleaf announced in March that it would be delaying the release of its 2022 year-end report as a result of converting the company's accounting methods from the International Financial Reporting Standards (IFRS) to Generally Accepted Accounting Principles (GAAP). On Friday the company announced it will release its 2023 first quarter results on May 17.

Investors reacted to the the filings amid the broader positive sentiment from the news that federal cannabis banking legislation had been reintroduced by lifting Curaleaf's stock to the highs of it's 30-day range. The company's shares are down 30% for the year, and 62% off their November 7 high of $7.25, closing the week at $2.80.

Curaleaf grows in some markets, faces challenges in established states

The report touted Curaleaf's acquisition of Tryke, a multistate operator in Arizona, Nevada and Utah. Outside of that deal, the company further expanded its footprint in Arizona, Nevada and Florida.

The financial statement notes a few significant events that occurred in 2023, which are not reflected in the filing. They include the company announcing its plan to close up shop in California, Oregon and Colorado, while also consolidating production facilities in Massachusetts. 

“Given the substantial price compression and continued lack of illicit market enforcement in Colorado and California, we could not justify investing more capital and time to build the more meaningful vertical presence that would be required to compete effectively in such an environment," said Jordan.

The company acquired a Utah medical cannabis chain on April 10. Part of the deal involves the issuance of more notes, but they will not be priced until 10 business days after the release of the fourth quarter financial report. 

New Jersey requires cannabis operators in the adult-use market to secure labor peace agreements with a local union as part of the license approval process. That state's Cannabis Regulatory Commission temporarily revoked Curaleaf's adult-use licenses when they were recently up for renewal. Four days later, the CRC reinstated those renewals with stipulations involving further disclosure of labor agreements and social equity plans. 

Curaleaf took credit for the license reinstatement in a press release, implying the result was a response to the company’s appeal. 

“The same day, prior to the review of the application for an injunction by the court, the CRC Board held an emergency meeting that resulted in the renewal of the Company’s licenses, subject to certain conditions," said the unsigned release. 

The company is facing investigations from regulatory agencies in at least three states, Massachusetts, Connecticut and Vermont for alleged failures to disclose financing from Russian oligarch Roman Abramovich. 

Jordan also said that New York’s nascent adult-use market was making it too difficult for MSOs to compete, which is why Curaleaf and others recently sued the state to allow existing medical operators to enter the adult-use market. 

"New York's adult-use program has gotten off to a rocky start and remains uncertain as to when it will open to the incumbent registered organizations,” said Jordan. “Without a doubt, the [Office of Cannabis Management]s unwillingness to open the state's legal cannabis program to all participants, the existing [Registered Organizations]s and new social equity entrants alike, has significantly exacerbated the illicit market and caused unfortunate, unintended consequences,” said Jordan. 

Jordan further blamed the state for the prevalence of illicit and gray market operators. 

“At this point, unregulated, unsafe, and untested cannabis products are freely available at over 15,000 illegal storefronts,” he said. “In response, Curaleaf, in concert with other market participants, have launched a lawsuit against the state for its unconstitutional actions that are intentionally holding back the free market development of the program. We look forward to a speedy resolution and continue to believe New York, ultimately, will represent one of the strongest legal cannabis markets in the U.S."

Jordan’s optimistic about federal banking reform

In what has become a common refrain in MSO quarterly reports, major cannabis companies continue to lament Congress’s failure to pass the SAFE Banking Act. Jordan repeated those concerns but was also optimistic about the ongoing efforts for cannabis banking reform on a federal level as the U.S. Cannabis Council ramps up its lobbying efforts. 

Jordan said the U.S. Cannabis Council is setting up a super PAC to raise funds and lobby for SAFE and other industry legislative interests. 

"We've learned our lesson. Last year, we really thought we had it over the line here in December of last year. We worked so hard on it, all of us, and it didn't happen. So, we're not going to make any predictions,” he said “But I do think the fact is, what I'm hearing is, they're trying to get it out of the Senate by July and into the House in September, with a vote in the House of Representatives somewhere in the fourth quarter, and try to get a signature of the president going into December. That's the target."

-- Zack Huffman, CRB Monitor News

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