Adam JacksonWhile the topic of potential rescheduling in the U.S. dominates so many cannabis earnings calls lately, Curaleaf Holdings (TSX: CURA) (OTCQX: CURLF) is staying focused on the up-and-coming European cannabis market.
During the company’s call last week, Executive Chairman Boris Jordan and CEO Matt Darin highlighted the enthusiasm around demand in Germany, which has increased since recent reforms took effect on April 1, including the decriminalization of cannabis.
“Most of the telemedicine platforms have added more patients in April than they’ve added in their whole history in the medical program in Germany,” Darin told analysts. He described the initial patient uptake as “more ambitious and aggressive than we originally anticipated,” although the numbers are still relatively small.
Darin also identified potential bottlenecks in the German market, such as the need for more trained doctors and the limited packaging capabilities of pharmacies.
While still very early, Jordan said the growth rates Curaleaf is seeing in markets like Germany and Poland have been “impressive” and above internal expectations so far. He suggested the European medical cannabis market could eventually become “very substantial in size.”
“We anticipate … being able to give more color in our next quarterly update in terms of how the industry is developing, but all looks very, very positive so far,” Jordan said.
The company is working closely with telemedicine providers, doctors, and pharmacies to build brand recognition and drive prescriptions for its product portfolio.
Curaleaf’s expansion efforts in Europe also got a boost in late March when it acquired Northern Green Canada, an EU-GMP certified cultivator. The executives said bringing that supply source in-house will enhance margins and increase control over their supply chain, mirroring their strategy in the U.S.
“We’re building a vertical supply chain very similar to what we’ve done in the states that we’ve been in a leading market share position,” Darin noted, citing the Northern Green deal’s rationale.
To further boost its European operations, Curaleaf will begin exporting EU-GMP certified flower from its cultivation facility in Portugal to Germany and Poland starting in the third quarter. The addition of that low-cost supply will complement the premium indoor flower from Northern Green, according to executives.
While the company’s international revenue is still relatively small – 2024 revenue is expected to come in at around $100 million – the international business segment grew 59% year-over-year in the first quarter. And with medical cannabis reform opening up major markets across Europe, Curaleaf is positioning itself to capitalize.
