Coming at the tail end of what can be considered the latest marijuana stock earnings season, Curaleaf (OTC: CURLF) on Tuesday unveiled its fiscal second-quarter 2019 results.
For the quarter, the company booked total revenue of $48.5 million, a more-than-threefold increase from the Q2 of fiscal 2018. In contrast, its net loss nearly quintupled -- it deepened to $24.5 million ($0.05 per share) from the year-ago shortfall of $4.93 million ($0.01).
Neither line item met analyst expectations. The few prognosticators actively following the stock were collectively estimating $49.8 million in total revenue and a per-share net loss of $0.02.
A steeper loss was certainly not a surprise, however. In line with general trends in marijuana stocks, Curaleaf has engaged in a strategy of rapid expansion through acquisitions. In Q2 alone, these included a deal to pay $950 million to buy Cura Partners, maker of the Select brand of premium vaporizer cartridges. The company also struck deals to buy two dispensaries and a cannabis growth/retail operation in Arizona.
After Q2, Curaleaf was and is still actively shopping for assets. Last month, it announced that it signed an agreement to purchase dispensary operator GR Companies (doing business as Grassroots) in an $875 million cash-and-stock transaction. The company claimed the deal "solidifie[d] Curaleaf's position as the world's largest cannabis company by revenue and the largest in the U.S. across key operating metrics."
This acquisition binge is a key reason for the deepened net loss. The company intends to absorb bottom-line deficits on its way to becoming a major force in the retail segment of the cannabis market.
"We have made significant progress over the last few months in executing on our strategy to become the leading vertically integrated multi-state cannabis operator in the United States," Curaleaf wrote in the press release detailing the Q2 results. "With the industry's largest operational footprint, we have the scale to rapidly accelerate growth across the country."
Going by Curaleaf stock's performance today, it seems investors are generally on board with the company's optimism. The shares closed up marginally higher on the day.
More From The Motley Fool
This article was originally published on Fool.com