Cannabis Multi-state Operator (MSO)


fundamental analysis


recommendation: strong


HQ: 301 Edgewater Place Suite 405 Wakefield, MA 01880

Founded: 2010

Facilities:  Arizona, Connecticut, Florida, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon and Pennsylvania


CuraLeaf operates and owns 12 cultivation sites, 28 dispensaries, and 9 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey, and New York. CuraLeaf leverages its extensive research and development capabilities to distribute cannabis products in multiple formats. They are focused on patient education, physician engagement and community outreach to build national retail brand.


Enterprise Value: $4.20 billion

Size within Cannabis Industry: roughly 6th of 200+

Size among cultivators: 5th of 40

# of employees: 700

markets: strong

Primary: Operations in ten states (Arizona, Florida, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, Oregon and Pennsylvania)

Secondary: Approval pending in two more states (Ohio and Pennsylvania).

Subsidiaries, Interests:

Majority Subsidiaries: PalliaTech MD Processing, LLC, PalliaTech AZ, Inc, CuraLeaf Midtown, CuraLeaf, Spark Dispensary

Minority Interests: Groen Investment Group, Inc.


Cultivation: strong

Current Production: 63,000 lbs/yr

Future Capacity: 2020: 290,000 lbs/yr

Extracting 20,000+ grams of cannabis oil per week

Distribution: Direct sales: yes

Store Networks: Current footprint allows for 71 stores operational by 2020 YE. CuraLeaf’s primary method of sales currently occurs in its brick-and-mortar dispensaries across the U.S. However, CuraLeaf also offers home delivery services across the State of Florida, in compliance with all state regulations. Also, in Florida, they offer drive-thru service at one of their Cadispensaries. In multiple States, they offer customers the option to pick-up online orders in store. CuraLeaf aims to expand their e-commerce and delivery operations, where permitted, to offer convenient access for their customers and meet the demands of an evolving retail landscape.

Supply Agreements: In August 2018, CuraLeaf entered into a purchase agreement to acquire 100% of the membership interests of ATG, a registered marijuana dispensary licensed by the Massachusetts Department of Health. ATG is operating a 53,600 square foot cultivation facility in Amesbury, Massachusetts and a medical dispensary in Salem, Massachusetts. In the same month, CuraLeaf also entered into a purchase agreement to acquire 100% of the membership interests of HMS Health, LLC, a holder of Stage 2 licenses to cultivate and dispense medical cannabis and a Stage 1 license to process medical cannabis in the State of Maryland.

Registered Patients: 150,000 in March 2019.


Vertically Integrated: one of the largest vertically integrated multistate cannabis operators in US

Horizontally Diversified: no

financials: strong

Stock Symbol CURLF
Recent Price 9.05
Shares Outstanding 11.8
Market Cap ($ mil) 106
Revenue (MRQ) 32
Revenue Rank 4
Gross Margin 25%
Income (MRQ) (34)
EPS (2.86)
Price/Sales 58

management: strong

CEO:   Joseph Lusardi

CFO: Neil Davidson

CuraLeaf Management are experienced in managing large businesses and growth. They financed for future expansion through listing on Canadian security exchange. CEO Mr. Lusardi has almost a decade of cannabis experience through which he has cultivated bottom-up expertise in cannabis company implementation and management, as well as 20 years’ experience in finance, private equity, and entrepreneurship. He has been instrumental in developing an organizational strategy focused on bringing the Company’s commitment to the advancement of cannabis science to all CuraLeaf subsidiaries, and, ultimately, patients in need of medical cannabis. To support this effort, he raised over $500 million dollars to invest into the Company’s infrastructure, research and development, and staff. Mr. Lusardi continues to guide corporate strategy with a focused view on the continual improvement of best practices.


CuraLeaf has become the most accessible national cannabis brand with the largest operational branded dispensary footprint in the country and the recent launch of their CBD line under CuraLeaf Hemp. They created strategic presence in highly populated, limited license states, which has served as an important foundation for aggressive expansion plan across the country. Multiple product formats provide an array of administration options (inhalation, ingestion, sublingual, and topical) for the novice to the experienced user.


CuraLeaf raised approximately C$520 million (US$400 million) in an oversubscribed private placement offering led by GMP Securities L.P. and Canaccord Genuity Corp. (the “Co-Lead Agents”), on behalf of a syndicate of agents, including Cormark Securities Inc., Eight Capital and Haywood Securities Inc.


Price to Book: 1.48

EV / Revenue: 2.18

recommendation: strong

CuraLeaf Holdings, based in Wakefield, Mass., operates an integrated network of medical and wellness cannabis facilities throughout the United States. CuraLeaf cultivates, processes, markets, and dispenses marijuana products in a range of forms, including flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles. Multiple product formats provide an array of administration options, including inhalation, ingestion, sublingual, and topical.

We believe the company has strong management, based on experience in cannabis, compliance and market growth. CuraLeaf is one of a very small group of operators to successfully obtain cultivation licenses in more than one of the modern, limited license, merit-based application state programs.

CuraLeaf also provides non-cannabis management and consultative services to licensed cannabis operators, to assist with cultivation, extraction, production, and retailing. Founded in 2010, CuraLeaf currently operates a network of 34 dispensaries, 12 cultivation sites, and 10 processing sites in 12 states. Since going public on October 29, 2018, CURA has gained 23%, compared to a loss of 7% for the S&P 500.

CuraLeaf Holdings was the largest marijuana initial public offering (IPO) ever, with the company temporarily boasting a lofty valuation of more than $4 billion, after its debut in late October. Managed Revenue grew to $87.8 million in full year 2018, up 209% on a year-over-year basis, and Total Revenue increased 298%, driven by a combination of organic growth and acquisitions.

Will its stock price improve in the long term? We think so.

There’s a bull case, and it’s persuasive.

Strong capital position with $266.6 million cash on hand at year end, supported by a prudent capital allocation strategy that is focused on strategic acquisitions and rapid store expansion. CuraLeaf should start to see an improved bottom line, as it generates synergies throughout the marijuana supply chain. The company currently covers 70% of the U.S. cannabis market, reaching 134 million of the addressable population.

CuraLeaf does struggle on the bottom line and will need to improve net income, which is on a downward slope. In the fourth quarter of 2018, despite growing revenue, the company reported a net loss of $16.5 million, compared to net income of $628,000 in the same quarter a year ago.

For these reasons, we think CuraLeaf, at or near its current price of $8.80 a share, is still a very good investment opportunity—though as the price rises this opportunity will eventually disappear.