Curaleaf Reports First Quarter 2023 Results

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Written by Doug Hampton
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First quarter 2023 revenue of $336.5 million, representing an increase of 14% year-over-year, and adjusted EBITDA(1) of $73.2 million

Operating cash flow from continuing operations of $30.6 million and cash on balance sheet of $115.8 million

NEW YORK, May 17, 2023 /PRNewswire/ — Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer products in cannabis, today reported its financial and operating results for the first quarter ended March 31, 2023. All financial information is reported in accordance with U.S. generally accepted accounting principles (GAAP) and is provided in U.S. dollars unless otherwise indicated.

Executive Chairman Boris Jordan said, “2023 is off to a strong start for Curaleaf, with first quarter year-over-year revenue growing 14% to $336.5 million, beating our guidance of low double-digit growth. Adjusted gross margin was 48% and adjusted EBITDA margin was 22%. We ended the quarter with $116 million of cash on our balance sheet and generated $31 million in operating cash flow from continuing operations. We continue to optimize our U.S. assets for responsible growth and are very excited about the investments we are making internationally, setting the stage for robust growth in ’24, ’25, and ’26 as cannabis adoption accelerates across Europe. We’ve entered 2023 from a position of strength with ample cash on hand, and will be investing in our business, setting us up for years of market share expansion.”

Matt Darin, Chief Executive Officer of Curaleaf, stated, “Since I moved into the CEO role one year ago we’ve moved decisively to maximize opportunities in high growth markets while scaling back from unprofitable markets. We are laser focused on operating efficiencies in every aspect of our business both in the U.S. and Europe, establishing a lean asset base from which we will drive margin improvements, operating leverage, and cash generation. Our focus is on profitable, responsible growth as we continue to innovate new products, strengthen our brand portfolio and deliver a best in class retail experience.”

First Quarter 2023 Financial Highlights

  • Net Revenue of $336.5 million, a year-over-year increase of 14% compared to Q1 2022 revenue of $296 million, which excludes discontinued operations
  • Gross profit of $160.8 million and gross margin of 48%
  • Adjusted gross profit net of add-backs of $162 million, adjusted gross margin of 48%
  • Net loss attributable to Curaleaf Holdings, Inc., including discontinued operations, of $54.4 million or net loss per share $0.07
  • Adjusted net loss from continuing operations attributable to Curaleaf Holdings, Inc.(1) of $46 million or adjusted net loss per share1 of $0.05
  • Adjusted EBITDA of $73.2 million or 22% of revenue
  • Cash position at quarter end totaled $115.8 million









1

Adjusted EBITDA, adjusted gross profit, and adjusted net loss from continuing operations are non-GAAP financial measures, and adjusted EBITDA margin, adjusted gross margin, and adjusted net loss per share from continuing operations are non-GAAP financial ratios, in each case without a standardized definition under GAAP and which may not be comparable to similar measures used by other issuers. See “Non-GAAP Financial Performance Measures” below for definitions and more information regarding Curaleaf’s use of non-GAAP financial measures and non-GAAP financial ratios. See the section entitled “Reconciliation of Non-GAAP financial measures” below for a reconciliation of the non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures. 

First Quarter 2023 Financial Highlights (Unaudited)
($ thousands)


Three months ended


March 31, 2023


December 31, 2022


March 31, 2022

Total revenue

$           336,496


$               344,947


$           296,053

Adjusted EBITDA(1)(2)

73,179


76,867


76,130

Net loss attributable to Curaleaf Holdings, Inc.

(54,380)


(260,331)


(36,489)

Loss per share attributable to Curaleaf Holdings, Inc. – basic and
diluted

$               (0.07)


$                   (0.37)


$               (0.05)







(1) Adjusted EBITDA is a Non-GAAP financial measure without a standardized definition under GAAP, and which may not be comparable to similar measures used by other issuers.

(2) See the section,  “Non-GAAP Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. See the section entitled “Reconciliations of Non-GAAP financial measures” for reconciliations of Non-GAAP measures to the most directly comparable GAAP measures.

First Quarter 2023 Operational Highlights

  • Exceeded expense reduction plan by $20 million to realize annual gross run rate savings of $60M.
  • Opened three additional dispensaries in Florida, totaling 58 in the state.
  • Proactive closures of operations in California, Colorado and Oregon which will result in anticipated costs savings and an improved inventory position.
  • Launched JAMS, a flavor-forward cannabis edibles brand designed to meet the needs of new cannabis consumers, in Arizona and Florida.
  • Expanded Grassroots and Find brands to New Jersey and B Noble brand to Florida.
  • Began adult-use sales cannabis at Stamford and Hartford, Connecticut locations.
  • Closed Amesbury facility in MA, repurposed the Bellmawr facility in NJ, and closed the Homestead outdoor grow in Florida, three older sites that have been replaced by newer, more efficient facilities.

Post First Quarter 2023 Operational Highlights

  • Completed the acquisition of Deseret Wellness in Utah, giving Curaleaf three additional stores for a total of four in a market of 15.
  • Continued to strategically expand retail footprint in Florida, opening two additional stores reaching 60. As of May 17, 2023, Curaleaf retail operations totaled 152 nationwide.
  • Achieved record breaking sales on 4/20, led by New Jersey sales marking a 77% increase over 2022 and single highest day of sales in New Jersey ever.
  • Launched new Curaleaf mobile app and loyalty program which has 1.9 million members to date.
  • Expanded Grassroots brand to Florida.

Financial Results for the First Quarter Ended March 31, 2023
Revenue
($ thousands)


Three months ended


March 31, 2023


December 31, 2022


March 31, 2022

Retail revenue

$                                273,016


$                                276,532


$                                225,139

Wholesale revenue

62,104


67,229


69,661

Management fee income

1,376


1,186


1,253

Total Revenue

$                                336,496


$                                344,947


$                                296,053

Total revenue was a record $336.5 million in the first quarter of 2023, a decrease of 2% from $344.9 million in the fourth quarter of 2022 and an increase of 14% from $296.1 million in the first quarter of 2022. The Company’s year-over-year revenue growth primarily reflects continued organic growth driven by new retail store openings and the significant focus on research and development, resulting in the introduction of 171 products in 2022, three new brand launches, and the contributions from Tryke and Four 20 Pharma.

Retail revenue was $273.0 million, compared with $276.5 million in the fourth quarter of 2022, and up 21% from $225.1 million in the first quarter of 2022. Retail revenue represented 81% of total revenue. Curaleaf’s year-over-year retail revenue growth was supported by 28 new stores added in 2022, and the further expansion of adult-use cannabis around the country.

Wholesale revenue was $62.1 million, a decrease of 8% from the fourth quarter of 2022 and represented 18% of total revenue. Wholesale revenue declined 11% year-over-year due to price compression, a proactive reduction of wholesale accounts in California, Colorado, and Oregon and an intentional reduction of low profit raw material sales. 

Net Income Loss
($ thousands)


Three months ended


March 31, 2023


December 31, 2022


March 31, 2022

Total revenues

$              336,496


$                     344,947


$              296,053

Gross profit

160,750


116,354


161,311

Income (loss) from operations

16,441


(37,347)


26,328

Total other expense, net

(22,108)


(108,601)


(18,869)

Income tax expense

(40,686)


(38,562)


(41,450)

Net loss

(56,469)


(262,749)


(38,264)

Less: Net loss attributable to non-controlling interest

(2,089)


(2,418)


(1,775)

Net loss attributable to Curaleaf Holdings, Inc.

(54,380)


(260,331)


(36,489)

Net loss attributable to Curaleaf Holdings, Inc. was $54.4 million, compared with a net loss of $260.3 million in the fourth quarter of 2022 and $36.5 million in the first quarter of 2022. The year-over-year degradation in net loss was mainly due to reduced gross margin rate stemming from price compression.  

Balance Sheet and Cash Flow

As of March 31, 2023, the Company had $115.8 million of cash and $593.8 million of outstanding debt net of unamortized debt discounts.

During the first quarter of 2023, Curaleaf invested $26.0 million, net in capital expenditures, focused on cultivation, processing, and selective retail expansion in strategic markets.

Shares Outstanding

For the first quarter of 2023 and 2022, the Company’s weighted average subordinate voting shares plus multiple voting shares outstanding amounted to 718,117,628 and 708,897,273 shares, respectively.

As of March 31, 2023, and December 31, 2022, the Company’s issued and outstanding subordinate voting shares plus multiple voting shares amounted to 718,611,821 and 717,490,830 shares, respectively.

Conference Call Information

The Company will host a conference call and audio webcast for investors and analysts on Wednesday, May 17, 2023 at 5:00 P.M. ET to discuss Q1 2023 earnings results.  The call can be accessed by dialing 1-844-512-2926 in the U.S., internationally 1-412-317-6300, or from Canada 1-416-639-5883.  The conference ID # is 5395830. 

A replay of the conference call can be accessed at 1-877-344-7529, or internationally 1-412-317-0088, or from Canada 1-855-669-9658 using the replay ID # 2106379.

A webcast of the call can be accessed on the investor relations section of the Curaleaf website at ir.curaleaf.com.  The teleconference will be available for replay starting at approximately 7:00 P.M. ET on May 17, 2023, and will end at 11:59 P.M. ET on May 24, 2023.

Non-GAAP Financial and Performance Measures

Curaleaf reports its financial results in accordance with GAAP and uses a number of financial measures and ratios when assessing its results and measuring overall performance. Some of these financial measures and ratios are not calculated in accordance with GAAP. Curaleaf refers to certain non-GAAP financial measures and ratios such as “adjusted gross profit”, “adjusted gross margin”, “adjusted net loss”, “adjusted net loss per share”, “adjusted EBITDA”, and “adjusted EBITDA margin”. These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other issuers. The Company defines “adjusted gross profit” as gross profit net of cost of goods sold and related other add-backs. “Adjusted gross margin” is defined by Curaleaf as gross profit net of add-backs divided by total revenues. “Adjusted net loss” is defined by Curaleaf as Net Loss less other add-backs. “Adjusted net loss per share” is defined by Curaleaf as Adjusted Net Loss divided by the weighted average shares outstanding. “Adjusted EBITDA” is defined by Curaleaf as earnings before interest, taxes, depreciation and amortization less share-based compensation expense and other add-backs related to business development, acquisition, financing and reorganization costs. “Adjusted EBITDA margin” is defined by Curaleaf as adjusted EBITDA divided by total revenue. Curaleaf considers these measures to be an important indicator of the financial strength and performance of our business. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables below provide reconciliations of Non-GAAP measures to the most directly comparable GAAP measures.

Reconciliation of Non-GAAP financial measures
Adjusted Gross Profit from Continuing Operations (Unaudited)
($ thousands)


Three months ended


March 31, 2023


December 31, 2022


March 31, 2022

Gross profit from continuing operations

$      160,750


$              116,354


$      161,311

Other add-backs (1)

1,436


52,503


621

Adjusted gross profit from continuing operations (2)

162,186


168,857


161,932

Adjusted gross profit margin from continuing operations (2)

48.2 %


49.0 %


54.7 %







(1) Other add-backs in Q4 2022 primarily include inventory write-downs primarily associated with the CA, CO, OR state exits, and Tryke FMV inventory step-up.

(2) Represents a non-GAAP measure or Non-GAAP ratio. See “Non-GAAP Financial and Performance Measures” above for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Gross Profit, the most comparable GAAP measure, to Adjusted Gross Profit, a non-GAAP measure

Gross profit from continuing operations was $160.8 million in the first quarter of 2023, compared with $116.4 million in the fourth quarter of 2022. Adjusted gross profit from continuing operations net of add-backs for the first quarter was $162.2 million compared with $168.9 million in the fourth quarter of 2022. Adjusted gross margin for the first quarter of 2023 was 48.2%, a decrease of 80 basis points compared with the fourth quarter of 2022. The decrease in gross margin was largely due to price compression in certain markets. 

Adjusted Net Loss from Continuing Operations (Unaudited)
($ thousands)


Three months ended


March 31, 2023


December 31, 2022


March 31, 2022

Net loss from continuing operations

$            (46,353)


$               (184,510)


$            (33,991)

Other add-backs (1)

9,448


61,551


6,162

Adjusted net loss from continuing operations (2)

(36,905)


(122,959)


(27,829)

Adjusted net loss per share from continuing operations (2)

$                 (0.05)


$                     (0.17)


$                 (0.04)







(1) Other add-backs in Q4 2022 primarily include goodwill impairments and inventory write-downs primarily associated with the CA, CO, OR state exits, and Tryke FMV inventory step-up.

(2) Represents a non-GAAP measure or Non-GAAP ratio. See “Non-GAAP Financial and Performance Measures” above for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Net Loss, the most comparable GAAP measure, to Adjusted Net Loss, a non-GAAP measure.

Adjusted EBITDA (Unaudited)
($ thousands)


Three months ended


March 31, 2023


December 31, 2022


March 31, 2022

Net loss

$             (56,469)


$              (262,749)


$             (38,264)

Net loss from discontinued operations, net of tax

(10,116)


(78,239)


(4,273)

Net loss from continuing operations

(46,353)


(184,510)


(33,991)

Interest expense, net

22,759


24,629


20,241

Income tax expense

40,686


38,562


41,450

Depreciation and amortization (1)

45,581


45,771


35,968

Share-based compensation

1,709


6,892


7,672

Other (income) expense, net

(651)


83,972


(1,372)

Other add-backs (2)

9,448


61,551


6,162

Adjusted EBITDA (3)

$               73,179


$                  76,867


$               76,130

Adjusted EBITDA Margin (3)

21.7 %


22.3 %


25.7 %







(1) Depreciation and amortization expense include amounts charged to cost of goods sold on the statement of profits and losses.

(2) Other add-backs in Q1 2023 primarily include costs related to legal fees and professional fees. Other add-backs in Q4 2022 primarily include inventory write-downs,  legal fees, and accounting and professional fees.

(3) Represents a non-GAAP measure or Non-GAAP ratio. See “Non-GAAP Financial and Performance Measures” below for definitions and more information regarding Curaleaf’s use of Non-GAAP financial measures and Non-GAAP ratios. The table above provides a reconciliation of Net Loss, the most comparable GAAP measure, to Adjusted EBITDA, a non-GAAP measure. 

Adjusted EBITDA was $73.2 million for the first quarter of 2023, a decrease of 5% from $76.9 million in the fourth quarter of 2022 and an decrease of 4% from $76.1 million in the first quarter of 2022. Adjusted EBITDA margin was 21.7%, a decrease of 60 basis points from 22.3% in the prior quarter and an decrease of 400 basis points from 25.7% in the first quarter of 2022. The sequential decrease in Adjusted EBITDA primarily reflects lower gross profit margin driven primarily by pricing pressure in certain markets.  

Condensed Interim Consolidated Balance Sheets
($ thousands)


As of


March 31, 2023

December 31, 2022


Unaudited

Audited

Assets



Current assets:



Cash and cash equivalents

$                          115,807

$                          163,177

Accounts receivable, net

45,774

44,722

Inventories, net

261,309

240,996

Assets held for sale

144,172

150,817

Prepaid expenses and other current assets

29,123

28,974

Total current assets

599,414

628,686

Deferred tax asset

1,244

1,564

Property, plant and equipment, net

614,951

607,932

Right-of-use assets, finance lease

153,833

156,868

Right-of-use assets, operating lease

119,701

120,827

Intangible assets, net

1,197,897

1,218,511

Goodwill

626,691

625,129

Investments

2,679

2,797

Other assets

46,686

48,937

Total assets

$                       3,363,096

$                       3,411,251




Liabilities and shareholders’ equity



Current liabilities:



Accounts payable

$                            72,494

$                            81,676

Accrued expenses

111,329

105,764

Income tax payable

202,295

162,928

Lease liability, finance lease

8,203

7,853

Lease liability, operating lease

16,264

16,074

Current portion of notes payable

69,853

51,882

Current contingent consideration liability

17,112

18,537

Liabilities held for sale

17,286

20,217

Deferred consideration

23,045

24,446

Financial obligation

4,973

4,740

Other current liabilities

1,882

1,726

Total current liabilities

544,736

495,843

Deferred tax liability

304,408

308,974

Notes payable

523,943

570,788

Lease liability, finance lease

165,942

167,075

Lease liability, operating lease

110,244

111,360

Contingent consideration liability 

10,613

10,572

Deferred consideration

38,527

36,854

Financial obligation

212,976

214,139

Other long-term liability

98,790

94,829

Total liabilities

2,010,179

2,010,434




Temporary Equity:



Redeemable non-controlling interest contingency

120,723

121,113




Shareholders’ equity:



Additional paid-in capital

2,166,435

2,163,061

Treasury shares

(5,208)

(5,208)

Accumulated other comprehensive loss

(15,097)

(18,593)

Accumulated deficit

(913,936)

(859,556)

Total shareholders’ equity

1,232,194

1,279,704

Total liabilities and shareholders’ equity

$                       3,363,096

$                       3,411,251

Condensed Interim Consolidated Statements of Operations (Unaudited)
($ thousands, except for share and per share amounts)


Three months ended March 31,


2023


2022

Revenues:




Retail and wholesale revenues

$                  335,120


$                  294,800

Management fee income

1,376


1,253

Total revenues

336,496


296,053

Cost of goods sold

175,746


134,742

Gross profit

160,750


161,311

Operating expenses:




Selling, general and administrative

112,174


100,582

Share-based compensation

1,709


7,672

Depreciation and amortization

30,426


26,729

Total operating expenses

144,309


134,983

Income from operations

16,441


26,328

Other income (expense):




Interest income

22


59

Interest expense

(12,103)


(13,007)

Interest expense related to lease liabilities and financial obligations

(10,678)


(7,293)

Other income (expense), net

651


1,372

Total other expense, net

(22,108)


(18,869)

(Loss) income before provision for income taxes

(5,667)


7,459

Income tax expense

(40,686)


(41,450)

Net loss from continuing operations

(46,353)


(33,991)

Net loss from discontinued operations, net of tax

(10,116)


(4,273)

Net loss

(56,469)


(38,264)

Less: Net loss attributable to non-controlling interest

(2,089)


(1,775)

Net loss attributable to Curaleaf Holdings, Inc.

$                  (54,380)


$                  (36,489)





Per share – basic and diluted:




Net loss from continuing operations

$                      (0.06)


$                      (0.04)

Net loss from discontinued operations

(0.01)


(0.01)

Loss per share attributable to Curaleaf Holdings, Inc. – basic and diluted

$                      (0.07)


$                      (0.05)

Weighted average common shares outstanding – basic and diluted

718,117,628


708,897,273

Condensed Interim Consolidated Statements of Cash Flows (Unaudited)
($ thousands, except for share and per share amounts)


Three months ended March 31,


2023


2022

Cash flows from operating activities:




Net loss from continuing operations

$           (46,353)


$           (33,991)

Adjustments to reconcile Net loss from continuing operations to net cash provided by (used in) operating activities:




Depreciation and amortization

45,369


36,582

Share-based compensation

1,709


7,672

Non-cash interest expense

6,845


1,808

Amortization of operating lease right-of-use assets

3,921


2,975

(Gain) loss on debt retirement

(3,300)


Loss on sale or retirement of asset

3,122


(3)

(Gain) loss on investment

(325)


(624)

Deferred taxes

(5,103)


(974)

Changes in assets and liabilities:




Receivables

3,400


10,972

Inventories

(22,255)


887

Prepaid expenses and other current assets

700


(11,042)

Tax receivable

(749)


Other assets

2,731


(28,412)

Accounts payable

(9,339)


33,432

Income taxes payable

42,237


71,311

Operating leases, net (right-of-use asset acquisitions and disposals)

113


Operating lease liabilities

(3,838)


(2,767)

Accrued expenses

11,741


2,386

Net cash provided by operating activities from continuing operations

30,626


90,212

Net cash used in operating activities from discontinued operations

(16,470)


(44,589)

Net cash provided by operating activities

14,156


45,623





Cash flows from investing activities:




Purchase of property, plant and equipment, net

(26,040)


(22,436)

Proceeds from consolidation of acquisitions


18,867

Acquisition related cash payments


(86,776)

Amounts advanced for notes receivable, net of payments received

(3,229)


1,269

Net cash used in investing activities from continuing operations

(29,269)


(89,076)

Net cash used in investing activities from discontinued operations


(7,518)

Net cash used in investing activities

(29,269)


(96,594)





Cash flows from financing activities:




Lease liability payments

(1,860)


(880)

Principal payments on notes payable and financing liabilities

(30,401)


(1,322)

Remittances of statutory withholdings on share-based payment awards


(3,040)

Exercise of stock options

24


463

Net cash used in financing activities from continuing operations

(32,237)


(4,779)

Net cash used in financing activities from discontinued operations

(123)


(111)

Net cash used in financing activities

(32,360)


(4,890)





Net decrease in cash

(47,473)


(55,861)

Cash and cash equivalents, beginning of period

163,177


299,329

Effect of exchange rate on cash

103


(868)

Cash and cash equivalents, end of period

$           115,807


$           242,600

About Curaleaf Holdings

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf”) is a leading international provider of consumer products in cannabis with a mission to improve lives by providing clarity around cannabis and confidence around consumption. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf, Select, and Grassroots provide industry-leading service, product selection and accessibility across the medical and adult-use markets. In the United States, Curaleaf currently operates in 19 states with 152 dispensaries, and employs nearly 5,500 team members. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Canadian Securities Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com. 

###

Curaleaf IR Twitter Account:   

https://twitter.com/Curaleaf_IR    

Investor Relations Website:   

https://ir.curaleaf.com/

Contact Information:

Investor Contact:
Curaleaf Holdings, Inc.
Camilo Lyon, Chief Investment Officer
[email protected]

Media Contact:
Curaleaf Holdings, Inc.
Tracy Brady, SVP Corporate Communications
[email protected]

Disclaimer

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian securities laws and United States securities laws (“forward-looking statements”). Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on management’s current beliefs, expectations or assumptions regarding the future of the business, plans and strategies, operational results and other future conditions of the Company. In addition, the Company may make or approve certain statements in future filings with Canadian securities regulatory authorities, in press releases, or in oral or written presentations by representatives of the Company that are not statements of historical fact and may also constitute forward-looking statements. All statements, other than statements of historical fact, made by the Company that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words such as “assumptions”, “assumes”, “guidance”, “outlook”, “may”, “will”, “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”, “plans”, “intends”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, or the negative of those words or other similar or comparable words. In particular, but without limiting the foregoing, disclosure in this press release as well as statements regarding the Company’s objectives, plans and goals, including expectations regarding benefits of recent or future acquisitions, restructuring and cost-reduction efforts of the Company, as well as future operating results and economic performance are forward-looking statements. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations.

Holders of securities of the Company are cautioned that forward-looking statements are not based on historical facts but instead are based on reasonable assumptions and estimates of management of the Company at the time they were provided or made and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, but not limited to, risks and uncertainties related to: the impact of any restatement of financial statements of the Company or other actions that may be taken or required as a result of such reviews, including the reaction to any such restatement by Curaleaf’s shareholders, the possibility that the ongoing review may identify further errors, which may be material, in the Company’s accounting, any potential inquiry by Canadian and/or U.S. securities regulatory authorities with respect to the review of the Audit Committee, the risks of litigation and of governmental investigations or proceedings arising out of or related to any accounting irregularities or any restatement of the financial statements of the Company, including the direct and indirect costs of such investigations and restatement, and additional information arising from the Company’s continuing analysis and review of its historical recognition of revenue and its prior financial statements and the performance of additional work in this regard; risks and uncertainties related to the legality of cannabis in the U.S., including the fact that cannabis is a controlled substance under the United States Federal Controlled Substances Act; anti-money laundering laws and regulations; the lack of access to U.S. bankruptcy protections; financing risks, including risks related to additional financing and restricted access to banking; general regulatory and legal risks, including risk of legal, regulatory or political change; general regulatory and licensing risks; limitation on ownership of licenses; risks relating to regulatory action and approvals from the U.S. Food and Drug Administration; loss of foreign private issuer status in the U.S.; risks related to internal controls over financial reporting; litigation risks; increased costs as a result of being a public company in Canada and the U.S.; environmental risks, including risks related to environmental regulation and unknown environmental risks; general business risks including risks related to the Company’s expansion into foreign jurisdictions; future acquisitions or dispositions; service providers; enforceability of contracts; the ability of our shareholders to resale their subordinate voting shares on the Canadian Securities Exchange; the Company’s reliance on senior management and key personnel, and the Company’s ability to recruit and retain such senior management and key personnel; competition risks; risks inherent in an agricultural business; unfavorable publicity or consumer perception; product liability; product recalls; results of future clinical research; dependence on suppliers; reliance on inputs; risks related to limited market data and difficulty to forecast; intellectual property risks; constraints on marketing products; fraudulent or illegal activity by employees, consultants and contractors; information technology systems and cyber-attacks; security breaches; the Company’s reliance on management services agreements with subsidiaries and affiliates; website accessibility; high bonding and insurance coverage; risks of leverage; management of the Company’s growth; the fact that past performance may not be indicative of future results and that financial projections may prove materially inaccurate or incorrect; risks related to conflicts of interests; challenging global economic conditions; business structure risks; including the status of the Company as a holding company; no dividend record; risks related to the senior secured notes of the Company; concentrated voting control; risks related to the sale of a substantial amount of the Company’s subordinate voting shares; the volatility of the market price for the subordinate voting shares; liquidity risks associated with an investment in the subordinate voting shares; enforcement against directors and officers outside of Canada may prove difficult; and tax risks; as well as those risk factors discussed under “Risk Factors” in the Company’s Annual Information Form dated May 1, 2023 for the fiscal year ended December 31, 2022, and additional risks described in the Company’s Annual Management’s Discussion and Analysis for the year ended December 31, 2022 (both of which documents have been filed on the Company’s SEDAR profile at www.sedar.com and on its EDGAR profile at www.sec.gov/edgar/html), and as described from time to time in documents filed by the Company with Canadian securities regulatory authorities. The purpose of forward-looking statements is to provide the reader with a description of management’s expectations, and such forward-looking statements may not be appropriate for any other purpose. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. You should not place undue reliance on forward-looking statements contained in this press release. Such forward-looking statements are made as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.

Neither the Canadian Securities Exchange nor its Regulation Service Provider has reviewed and does not accept responsibility for the adequacy or accuracy of the content of this press release.

SOURCE Curaleaf Holdings, Inc.

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