The Massachusetts-based company announced on 9 March 2021 that it would acquire Europe’s largest vertically-integrated independent cannabis group, Emmac Life Sciences for US286 million.
Curaleaf’s European investment will give it the platform for global dominance
Curaleaf’s Boris Jordan: Africa on his radar
Boris Jordan, the billionaire executive chairman of Curaleaf, told investors on an earnings call on 9 March 2021 that the Emmac acquisition was a “transformational launching point” and would turn the company into a dominant force in the global cannabis industry.
“[This is] the first step towards engaging world markets,” said Jordan. He said Europe would provide a springboard to Africa and the Middle East and the company’s strategy was to open markets in the footsteps of legalization.
Africa next on the radar
“It also paves the way for entry into South Africa and Morocco, which are both exploring proposals to introduce legalization,” he said.
“2021 will be transformative,” he said. “The future of cannabis will be won by those who are investing aggressive in growth and scale.
“We believe Europe will evolve into a cannabis marketplace that will eventually rival the U.S.,” Jordan said during the earnings call.
Jordan, who owns a US$2.5 billion stake in the company, said Europe is part of the company’s long-term growth strategy. Jordan explained during Curaleaf’s earnings call that Europe’s population of 743 million is more than twice of the U.S. and the continent will eventually provide a total addressable market of $120 billion.
Curaleaf plans to expand its global footprint in step with the march of marijuana reform. European countries have followed a similar trajectory in medical cannabis legalization as seen in the U.S. Over the next few years, some E.U. countries are expected to legalize recreational cannabis. Switzerland and the Netherlands both plan to launch recreational pilot programs this year. Luxemburg is discussing legalization by 2023.
Curaleaf dispensery in the US
Jordan described the Emmac acquisition as “a foothold for future expansion” in Eastern Europe, including existing medical markets in Poland and Croatia as well as potential new markets in countries like Ukraine.
To meet growing demand, Emmac’s cultivation facility in Portugal, which happens to be one of the oldest licensed cannabis growing facilities in Europe, plans increase its annual cultivation capacity to 10 tons by 2022.
Curaleaf: record earnings and less loss
Curaleaf also reported its fourth quarter and full-year earnings on 9 March 2021. The company’s total revenue for 2020 was a record $626.6 million, a 183% increase over 2019. Curaleaf reported $144 million in adjusted EBITDA, four times 2019 levels. However, the company reported a net loss for 2020—$61.7 million, compared to a net loss of $67.2 million in 2019.
Jordan, who assumed control of Curaleaf in 2013 through his private equity company and took it public on the Canadian Stock Exchange in 2018, told Forbes in November that he’s positioning Curaleaf as a consumer-packaged goods company.
“We’re making the products much more mainstream for our customer base—we’ll be no different than Coca-Cola or Frito-Lay,” Jordan told Forbes.
To reinforce his packaged goods strategy, Jordan has also brought in new leadership this year. In January 2021, Curaleaf’s longtime CEO, Joe Lusardi stepped down to make room for Joe Bayern, who had been president of Curaleaf and previously worked for Dr. Pepper Snapple, and Cadbury.
Curaleaf big in the dispensery business
“We are embarking on the next phase of achieving our ambition to become the global leader in cannabis,” Bayern said during Tuesday’s call.
Curaleaf became America’s largest cannabis company thanks to Jordan’s aggressive rollup strategy, one he said he refined in Europe by consolidating the data center industry with Telecity. In September 2019, Curaleaf had 49 dispensaries, but it now has 101. In 2019, Curaleaf announced two of its largest acquisitions that transformed the company—Cura Partners (owner of the Select brand), a vape and THC concentrates company, which Curaleaf bought in an all stock deal valued at US$365 million, and Grassroots, one of the largest private cultivators and retailers with 30 dispensaries across Illinois, Nevada, Michigan, Oklahoma, Ohio, North Dakota, which Curaleaf bought for US$830 million.
Jordan is now deploying that strategy again in Europe.