This week’s cannabis earnings include Acreage Holdings, Charlotte’s Web, Cresco Labs, MedMen, and Curaleaf
SmallCapPower | May 27, 2019: Here is a preview of upcoming Canada-listed cannabis earnings for the week of May 27 to May 31, 2019. Companies reporting this week include: Acreage Holdings, Charlotte’s Web, Origin House, Cresco Labs, MedMen, Curaleaf, and Green Thumb.
*Share prices as at close May 23, 2019, data obtained from S&P Cap IQ
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Charlotte’s Web Holdings, Inc. (CSE:CWEB) – $19.62
Cannabis
Charlotte’s Web Holdings is a fully vertically-integrated, CBD-focused company with operations based in Boulder, Colorado. The Company is the market leader in the production and distribution of hemp-derived CBD products. CWEB reported Q4/18 revenue of US$20.5M, and since Q4/18, the Company has added 2,300 retail stores for a total of 6,000+ stores. However, the roll-out of hemp derived CBD has been slow in the U.S. with larger retail chains slowly beginning to adopt the product. Management guided Q1/19 revenues of between US$21M-US$22M and revenues of between $120M-$170M for FY2019. As a result, analysts are expecting CWEB to bring in US$21.7M in revenue for the quarter (3 estimates).
- Market Cap: $1.8 Billion
- YTD Return: +29.3%
- Q1/19 Consensus Revenue Estimate: US$21.7M
- Earnings Date: May 28, 2019, after close
Acreage Holdings, Inc. (CSE:ACRG.U) – US$18.68
Cannabis
Acreage Holdings is an investment firm that specializes in the cannabis industry. The Company’s portfolio has diverse holdings in the cannabis industry: cultivating, processing, and dispensing operations. On April 18, Canopy Growth Corporation (TSX:WEED) announced that it would acquire Acreage for total consideration of $3.5B, which implied a 48% premium. Since Q4, Acreage has opened additional dispensaries in Florida, Illinois, and Connecticut. Investors are expecting the additional stores to provide a boost to Acreage’s topline in Q1/19. The Company reported $10.5M in revenue in Q4/18, lagging behind its peers, such as Trulieve (CSE:TRUL, $16.43 ), Curaleaf (CSE:CURA, $11.80), and Green Thumb Industries (CSE:GTII, $15.60), which reported $35.9M, $32.0M, and $20.8M in Q4/18 revenue, respectively. Analysts are expecting ACRG.U to bring in US$30.4M in revenue for the quarter (3 estimates).
- Market Cap: US$2.2 Billion
- YTD Return: -1.7%
- Q1/19 Consensus Revenue Estimate: US$30.4M
- Earnings Date: ~May 29, 2018
Origin House (CSE:OH) – $11.06
Cannabis
Origin House is a private equity firm that engages in acquisitions and investments in the cannabis industry. The Company focuses its efforts on intellectual property, research, products, and brands, and takes majority stakes in companies within the U.S. and Canadian markets. On April 1, 2019, Cresco Labs (CSE:CL) announced that it would acquire Origin House for a total consideration of ~$1B, which implies a 5.2% premium over Origin House’s closing share price the day before the deal was announced. Origin House is focused on creating a house of brands and owning distribution in California, which is the U.S.’ largest cannabis market. Management has guided Q1/19 revenue to come in at $11.0M for the quarter, which is well below analyst estimates of $23.7M (2 estimates).
- Market Cap: $740.7 Million
- YTD Return: +71.5%
- Q1/19 Consensus Revenue Estimate: US$23.7M
- Earnings Date: May 29, 2019
Cresco Labs Inc. (CSE:CL) – $14.93
Cannabis
Cresco Labs is a vertically-integrated company that engages in the cultivation, manufacturing, and retailing of cannabis and related products. The Company’s leading brands include Mindy’s Edibles, Reserve Premium Cannabis, and Remedi Medical. The Company has locations across six states, including Arizona, California, Illinois, Nevada, Ohio and Pennsylvania, and hopes to begin operations in New York, New Jersey, and Massachusetts in 2019. Cresco Labs is expected to have substantial revenue growth, as the Company has increased its number of open dispensaries to 21 in Q1/19 from 17 in Q4/18. The Company also announced that it would enter the Florida market through its acquisition of VidaCann, which would allow CL to operate 35 dispensaries in the state. Analysts are expecting Cresco Labs to bring in US$21.5M in revenue for Q1/19 (3 estimates).
- Market Cap: $3.0 Billion
- YTD Return: +61.4%
- Q1/19 Consensus Revenue Estimate: US$23.7M
- Earnings Date: May 29, 2019, after close
MedMen Enterprises Inc. (CSE:MMEN) – $2.98
Cannabis
MedMen Enterprises is a U.S.-based, vertically-integrated cannabis company. MedMen has 23 facilities currently operational that manufactures and distributes its products in New York, California, Arizona, Illinois, and Nevada. Management has provided revenue guidance of US$36.6M for Q3/19, as a result analyst are estimating US$35.5M in revenue for Q3 (4 estimates). Investors will be looking to see if MedMen can keep its SG&A expenses under control, as the Company’s expenses were 3x its revenues in Q2. MMEN’s cash burn was ~US$110M in Q2/19, and it had $87.7M of cash. On April 10, the Company announced it would raise an additional $60M through a follow-up equity offering. This follows an announcement made on March 22, 2019, where MMEN announced it had secured a $250M credit facility from Gotham Green Partners.
- Market Cap: $1.4 Billion
- YTD Return: -22.6%
- Q1/19 Consensus Revenue Estimate: US$35.5M
- Earnings Date: May 29, 2019, after close
Curaleaf Holdings, Inc. (CSE:CURA) – $11.80
Cannabis
Curaleaf is a vertically-integrated, U.S.-based cannabis company that cultivates, processes, markets and/or dispenses a variety of cannabis products, including vape oils, flower, pre-rolls, topical lotions, mints and edibles. The Company currently operates 44 dispensaries in 12 different states. On May 1, Curaleaf announced it is planning on acquiring Select Brands for a total consideration of $1.3B. Investors will be looking to see a bump in topline as Curaleaf added new dispensaries in Florida. Analysts are expecting Curaleaf to bring in US$37.5M in revenue for Q1/19 (5 estimates).
- Market Cap: $5.3 Billion
- YTD Return: +82.7%
- Q1/19 Consensus Revenue Estimate: US$37.5M
- Earnings Date: May 30, 2019, after close
Green Thumb Industries Inc. (CSE:GTII) – $15.60
Cannabis
Green Thumb Industries manufactures and sells various cannabis products in the United States. The Company sells cannabis products with a brand portfolio of over 300 stock keeping units that include products such as dried flower, concentrates for dabbing and vaporizing, edibles, and topicals. Analysts are expecting Green Thumb to bring in US$27.4M in revenue for Q1/19 (6 estimates).
- Market Cap: $2.6 Billion
- YTD Return: +42.5%
- Q1/19 Consensus Revenue Estimate: US$27.4M
- Earnings Date: May 30, 2019, after close
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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