Curaleaf Holdings, Inc. operates as an integrated medical and wellness cannabis operator in the United States. It cultivates, processes, markets, and/or dispenses a range of cannabis products and 53 dispensaries in 15 states of the United States.
Last year, the United States Food and Drug Administration (FDA) issued a warning letter to Curaleaf for illegally selling cannabidiol (CBD) induced product online to treat various ailments such as cancer, Alzheimer’s disease, etc. An FDA warning letter also known as a FDA Form 483 is issued to manufacturers or other organizations that has violated some rule in a federally regulated activity. A Form 483 just formalizes their observation in order for the manufacturer to address the issue(s) found, usually within 15 days.
That warning letter didn't slow the company down one bit. Within the last 12 months, Curaleaf has acquired Select and Grassroots, as well as made acquisitions in Arizona, California, Nevada and Ohio. According to the CEO Joseph Lusardi, Curaleaf is an undisputed leader in the cannabis industry with one of the largest operational footprint with the scale to rapidly accelerate growth across the country.
Just in the last month, Curaleaf expanded its line of Select brand products into Connecticut, making their Select Elite Live cartridges available at local medical dispensaries across the state. And in New Jersey, Curaleaf completed a vertically integrated medical cannabis non-profit corporation that holds one of the original six medical licenses in New Jersey.
And just in the last week, Curaleaf acquired Colorado-based BlueKudu is a producer of premium cannabis edibles for medical and adult-use customers, having sold over one million chocolate bars. If that wasn't enough, yesterday, the company announced it would launch its line of Select brand products into Maine, starting with its best-selling Select Elite Cannabis Oil Cartridges and fast-acting Select Nano Gummies.
Although, COVID-19 restrictions hampered recreational sales and in some states only allowed cannabis delivery when the states issued lock-down orders, as states try to figure out how to recoup lost revenue from being short down, COVID-19 might be a blessing in disguise.
After the coronavirus fears subside and the U.S. counts the economic toll, the legalization of cannabis is a potential beneficiary. Most states have huge budget deficits with an eye on legalization of especially recreational cannabis as a major source of new tax revenues.
One state pushing forward with recreational cannabis approval is New York. Governor Andrew Cuomo is one of the few governors pushing aggressively for approval and the state would probably be very close to legalization, if not for the ongoing setback from COVID-19.
Curaleaf is the biggest MSO and will benefit from the approval of recreational cannabis in New York. The company has the same four store locations as the other smaller MSOs so the big upside potential is probably in the other MSOs, but the large MSO having licenses amongst only 10 other companies is a huge plus to Curaleaf becoming a dominant MSO.
Look for other states to follow suit with Curaleaf being a benefactor. However, the chart suggests, now isn't the time to go long as price is just below the weekly supply at $7.90.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
