Cannabis extracts are growing in popularity and with the rise in demand comes a rise in Curaleaf‘s revenue.

The cannabis company, which prides itself on producing clean and safe cannabis extracts, recently published it’s Q1 earnings report. Based on the details of the report, Curaleaf’s total revenue for Q1 2019 inflated at a year-over-year growth rate of 288 percent, growing from $9.1 million in Q1 2018 to $35.3 million in Q1 2019.

Who is Curaleaf?

Curaleaf is an American cannabis company boasting 44 locations. Those 44 dispensaries are spread across 12 states, including New York, Maryland and Pennsylvania. The company, which was founded in 2010, has a vision to supply over 150,000 registered patients with access to the highest quality concentrated medical cannabis products, such as oils, edibles, capsules, topical lotions and vaporizer cartridges.

Curaleaf prides itself on carrying out its extraction process without the use of hydrocarbonated solvents or butane. All of the oils contained inside Curaleaf’s cartridges are made with cannabis grown at the company’s 12 cultivation sites. The oils are produced inside 11 processing facilities using supercritical CO2 extraction techniques.

“In the months since our last earnings release we have continued to execute on our strategy to become the leading vertically integrated multi-state cannabis operator in the United States,” said Curaleaf’s Chief Executive Officer, Joseph Lusardi.

“We reported strong organic growth, anchored by our core East Coast markets, and announced several landmark transactions, including the acquisition of Select, that will position Curaleaf to lead the industry forward. The combination of Curaleaf and Select will bring together the largest retailer and largest wholesaler, with the leading wellness and lifestyle brands in the United States, providing substantial opportunities to accelerate revenue growth, achieve significant cost savings and expand overall margins. I am excited for the future as we continue to pursue ways to expand our footprint and integrate across states to create value for shareholders.”

Managed Revenue for the first quarter of 2019 topped $40.7 million, representing an increase of 260 percent from the year before. In comparison with the previous quarter, the latest figure is a 17 percent increase.   

Let’s rewind to Q1 of 2018 for a moment. During this time, Curaleaf’s retail and wholesale revenue amounted to $5.7 million. Now, as we fast forward to Q1 of 2019, cannabis retail and wholesale revenue has climbed to $27.8 million. Curaleaf claims the rise in revenue as a result of launching new dispensaries and securing new acquisitions.

Curaleaf enjoyed a healthy $10.6 million in gross profit on all cannabis-related sales for Q1 of 2019, expanding the profit margin to 38 percent. Overall, things seem to be improving financially for the cannabis company, which reported $0.9 million gross profit on cannabis sales for Q1 of 2018.

Curaleaf’s financial results indicate losses of $10.9 million

Despite the good news, Curaleaf endured some pitfalls during the first quarter of 2019, when net losses totaled $10.9 million. This is quite a jump from the $3.4 million net loss reported in the first quarter of last year. Curaleaf attributed the company’s financial losses to net interest expenses ($4.3 million) and increases in share-based compensation, amortization and non-cash depreciation ($5 million).

On a per-share basis, Curaleaf’s net loss for Q1 2019 was $0.02,  more than the $0.01 reported in Q1 2018. This year’s adjusted EBITDA(1) loss clocked in at $3.7 million for Q1 2019, whereas in Q1 2019 the figure rested at $2 million.

Curaleaf’s Chief Financial Officer, Neil Davidson, isn’t worried about the losses, however. He noted that his company intends on broadening its footprint by using capital to fund acquisitions in major markets.

“We remain focused on positioning ourselves as the industry leader through prudent capital allocation to deliver strong organic growth. We are confident in our strategy and plans for accelerated growth in the back half of the year, as we build out a national platform and brands with the goal of producing profitable and positive cash flow over the long-term.”