Curaleaf Holdings Inc (CURLF) (Q3 2026) Earnings Call Highlights: Record $353 Million Revenue, ...

Negative Points

• Adjusted gross margin decreased 190 basis points year-over-year to 49%, due to higher facility expenses and wholesale price compression.

• German market experiencing severe price compression, with prices falling from 3 per gram to 0.90 per gram in one quarter, impacting international margins.

• Operational disruption at New Jersey cultivation facility required supplementing inventory with lower-margin third-party flower, though now resolved.

• Net loss from continuing operations was $37 million, or $0.14 per share, though improved from the prior year.

• Fourth quarter revenue guidance implies only 1-2% sequential growth, reflecting macro pressures and transitory headwinds.

• Consumer pressures from high energy costs and rising interest rates are impacting demand, as seen in declining consumer confidence data.

• International adjusted gross margin declined 160 basis points year-over-year to 42%, due to price compression in Germany and foreign currency translation.

• Inventory increased 5% year-over-year, with international inventory up 53%, largely due to elongated selling cycles and supply agreements.

• Capital expenditures are expected to be approximately $80 million for 2026, limiting free cash flow generation.

• Regulatory uncertainty remains with federal rescheduling delayed and potential enforcement actions in Germany uncertain in timing.

Q & A Highlights

Q: Can you discuss the bid price difference between Curaleaf and Organigram for Aurora, and how are you thinking about your bid going forward? A: CEO Boris Jordan said Curaleaf has not yet received the full circular or details of Organigram's bid, which is just under 10% better than Curaleaf's on today's close. He said Curaleaf is prepared to improve its bid substantially, but access to due diligence on Aurora will be an absolute condition, calling it negligent for Aurora's board to deny that given its fiduciary duties. He noted the tender date for shares is December 4.

Q: What is the magnitude of the price compression in Germany from irrational pricing by Canadian competitors, and how are greenwashing enforcement conversations with authorities going? A: CEO Boris Jordan said German prices fell from about EUR3 per gram to EUR0.90 per gram in one quarter, with October the worst month since the market began, likely tied to Canadian year-end product dumping. He said patient growth remains robust and Curaleaf has submitted detailed information on violating players to German regulators, who are reviewing the files. He pointed to the UK, where a similar crackdown led to margin recovery, as a precedent.

Q: Given the pricing pressure in Germany, how important is it to solidify the supply chain and vertical integration, whether through Aurora or otherwise? A: CEO Boris Jordan said Curaleaf is not dependent on the Aurora deal and has met with numerous suppliers over the last three months, negotiating contracts alongside its existing Canera agreement. He stressed that supply chain at the right price matters more than EU-GMP certification, noting Curaleaf already holds EU-GMP certifications in three markets and can add capacity in about a year if needed.

Q: With fourth quarter revenue guided to 1% to 2% sequential growth amid pricing pressures, what is the expectation for EBITDA and margins? A: CFO Ed Kremer said it would be prudent to model gross margins of 48% to 49% and EBITDA roughly flat with the third quarter, taking a conservative approach given the transitory German issues. CEO Boris Jordan added that the U.S. business remains strong with margins of 50% or better, and that the pressure is really Germany-related, where October was unexpectedly weak.

Q: You mentioned receiving federal registrations from the DEA in some medical states. Is that just for dispensaries or also cultivation, and is there any guidance on exporting from those operations? A: CEO Boris Jordan said Curaleaf is receiving registrations across the board at all its locations, with more than 80 received so far and more flowing in daily. He said export has not been addressed with authorities and the DEA is nowhere near that decision, adding that Curaleaf lacks extensive U.S. capacity to export anyway, with most capex directed at supplying domestic growth.

Q: Why pursue Aurora given the overlap on distribution and route to market, rather than a company that purely adds supply? A: CEO Boris Jordan said Aurora brings products and registrations in certain markets that would be very additive, noting some registrations, such as in Poland, can take up to two years per flower strain. He said Curaleaf spent six months analyzing Canadian companies and found Aurora the best fit, and he called the Organigram-Aurora deal massively dilutive with virtually no benefits.

Q: What are you seeing in Florida that supports adding stores, and how could newly awarded licenses impact the marketplace? A: CEO Boris Jordan said Curaleaf plans to end the year at around 89 to 90 Florida stores, up from about 65 at the start of the year, with same-store comps up year over year and strong new-store returns. He expects openings to slow next year as good locations get harder to find, and said new entrants are handicapped because Florida requires vertical integration and building a competitive grow and assortment takes hundreds of millions of dollars.

Q: How do you plan to market to consumers to capture demand as the intoxicating hemp shutdown approaches in about five weeks? A: CEO Boris Jordan said management held a full presentation today preparing for both the federal change and local changes, such as hemp prohibitions coming into play in Ohio and Illinois over the next week. He said Curaleaf has full marketing plans to move those consumers into its stores and products but declined to share details.

Q: Can you provide more color on the third quarter results, including the drivers of growth and margin performance? A: CFO Ed Kremer said revenue rose 11% year over year to $353 million, with retail up 6% and wholesale up 14% domestically and international up 28%, led by the UK, Germany and Poland. Adjusted gross margin was 49%, down 190 basis points, on higher facility expenses and softer wholesale margins, partly offset by retail margin gains and higher yields. Adjusted EBITDA was $78 million, a 22% margin.

Q: What drove the domestic adjusted gross margin decline, and what is the outlook for cash flow? A: CFO Ed Kremer said the domestic margin decline was driven by operational disruption at the New Jersey cultivation facility, which required lower-margin third-party flower and has since been fully resolved, plus wholesale price compression in New York, New Jersey and Illinois. He said third quarter operating and free cash flow were $22 million and $5 million, and he expects operating cash flow to increase significantly in the fourth quarter toward the roughly $150 million annual target.

Q: What progress has been made on the $20 million second-half expense reduction plan and on cultivation yields? A: President Rahul Pinto said third quarter results reflect solid progress toward the $20 million cost reduction goal, with store labor model changes and standardized back-of-house processes generating savings with no impact on service levels. Core SG&A fell to 31% of revenue, a 140 basis point improvement, and yields rose 15% year over year, helping steady gross margins and manage domestic inventory.

Q: What is the latest on federal rescheduling and its potential impact on Curaleaf? A: CEO Boris Jordan said the administrative law judge concluded rescheduling hearings in July, with final briefs due this week and recommendations expected shortly after. He said Curaleaf has begun receiving DEA registrations for its medical dispensaries, calling it an important milestone, and said greater Treasury clarity on tax treatment of adult-use cannabis could substantially

For the complete transcript of the earnings call, please refer to the full earnings call transcript .