The North America cannabis industry has a new champion. This well-known sector leader just completed an $875 million acquisition that puts it into a position to dominate the U.S. cannabis market.
Even though shares have been rallying for the last few weeks, I see plenty of upside ahead.
Curaleaf Holdings (CSE: CURL, OTC: CURLF) is an early leader in the high-growth U.S. cannabis industry with a market cap of $4.5 billion and operations in 18 states.
However, after one of the largest acquisitions in the history of the U.S. cannabis industry, Curaleaf has definitively taken the crown as the largest cannabis company in North America.
On July 23, Curaleaf completed its $875 million acquisition of Grass Roots, a fellow Chicago-based industry leader that operates in 12 states, owns 52 dispensaries, 14 cultivation sites, and 14 processing sites.
The new combined entity will become the largest cannabis company in the world by revenue. Here are some more details from the press release.
With completion of the acquisition of Grassroots, Curaleaf is the world’s largest cannabis company by revenue and the most diversified vertically integrated cannabis company in the United States, the world’s largest cannabis market.
The transaction expands Curaleaf’s presence from 18 to 23 states, with the combined company having affiliated operations spanning over 135 dispensary licenses, 88 operational dispensary locations, over 30 processing facilities and 22 cultivation sites with 1.6 million square feet of current cultivation capacity.
Curaleaf’s expanded geographic dispensary presence now offers access to medical or adult use Cannabis to more than 192 million people, or roughly two-thirds of the United States population.
The acquisition places Curaleaf in a position to build on its early industry leadership and dominate the cannabis market.
Curaleaf now has the best chance to be the first U.S. cannabis company to generate more than $1 billion in annual sales. After the acquisition, no other U.S. cannabis company comes close to Curaleaf’s portfolio of dispensaries, greenhouses, and processing facilities. This portfolio of cannabis assets should drive huge revenue growth in the next few years – particularly because U.S. cannabis sales are expected to surge.
U.S. Cannabis Sales Expected to Surge in Next Four Years
Curaleaf’s acquisition of Grass Roots comes at the perfect time. Up to seven states could be voting to legalize cannabis on November 3, when the U.S. votes on a new president. Currently, 33 states have already legalized medical or recreational cannabis.
Adding up to seven more states to the roster could represent a tipping point for the industry. Election day may trigger a wave of cannabis-friendly legislation that would drive big gains in sales and earnings.
This is why U.S. cannabis sales are expected to surge in the next four years. Here are some more details from mjbizdaily.com.
Retail sales of medical and recreational cannabis in the United States are on pace to eclipse $15 billion by the end of 2020, an increase of approximately 40% over 2019 sales figures, according to exclusive projections from the 2020 edition of the Marijuana Business Factbook.
Total U.S. sales could rise as high as $37 billion by 2024, according to exclusive projections from the latest Factbook, which was released Monday at MJBizConNEXT Direct.
Curaleaf Shares are Starting to Soar
Curaleaf shares have been responding to the good news. After hitting a new 52-week low in March due to COVID-19, Curaleaf has been on an epic rally. Shares are up 236% in the last 16 weeks, hitting a new 52-week high in the process.
Despite the recent gains, I still see plenty of potential for more gains. I expect Curaleaf to deliver strong revenue growth for the next few quarters and years, and I expect that to support more gains.
The Big Picture on Curaleaf – the New Cannabis Champion
Curaleaf just closed one of the largest acquisitions in the history of the U.S. cannabis industry. The new combined entity has created the largest cannabis company in North America. This company has the potential to deliver $1 billion in annual sales within 24 months.
Despite recent gains on the chart, I still see plenty of upside.
Michael Vodicka owns shares of Curaleaf Holdings (CURLF).
About the Author & Cannabis Stock Trades
Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.