Curaleaf CEO Matt Darin anticipates cannabis will prove recession-proof even as consumers start to feel the pain from surging inflation.
"I think we're seeing that cannabis is a recession-resistant staple and that despite inflationary pressures with expensive gas and groceries, people are prioritizing their cannabis purchases," Darin told Cheddar News.
His comments follow Curaleaf's second-quarter earnings report, Darin's first as CEO following his appointment in May. The company reported $337.6 million in revenue, an 8 percent jump sequentially, but reported widening losses, too.
Darin said Curaleaf has noticed an impact on consumers, related to surging inflation. Customers are spending less when they visit the company's dispensaries but stopping by more often.
Curaleaf also announced earlier this week it acquired a 55 percent stake in German medical cannabis company Four 20 Pharma. The deal creates a path for Curaleaf to acquire the entire company within two years after the kick-off of adult-use cannabis in Germany. Since Germany currently has the largest medical market in Europe, the deal grants Curaleaf access to the continent, which Darin called "the next frontier of growth, globally, for the cannabis market."
"Germany is the driver for the EU," Darin said. "This exciting acquisition with Four 20 Pharma is really giving us a continued stronger foothold in the German market ahead of adult use, which is really going to be a key catalyst for us as we look at 2024 and beyond."
Curaleaf has its sights set on domestic growth, as well. The U.S. cannabis giant has a footprint in 22 U.S. states, but Darin said the company is most bullish about the New Jersey market, which kicked off adult-use sales in April.
"That's an area that we're continuing to focus on investing. We're about to open up our third adult-use location in Bordentown here shortly, which we are very excited for. We're continuing to invest in the Northeast, ahead of adult-use launches in both Connecticut and New York. Those are both going to be major catalysts for the industry coming up here in the near future," he added.
Florida is another market that is exciting for cannabis operators, Curaleaf included. The state has a robust medical cannabis market with close to 800,000 medical patients, but efforts to legalize adult-use cannabis in the Sunshine State have floundered in recent years. Florida-based cannabis company Trulieve recently pledged $5 million in support of an effort to put cannabis legalization on the ballot in 2024.
"We're excited to see that initiative move forward," Darin said. "I think we'll see, ultimately, exactly what the timing looks like. But I think there's a lot of support from the industry, from the residents, and medical patients of Florida that want to see adult-use come to that state."
Like other major players in U.S. cannabis, Darin said he is "cautiously optimistic" on the odds of federal cannabis reform leading up to the midterm elections.
"It's really, I think, encouraging to see what's taking place and really support coalescing around SAFE Banking plus certain social equity measures, and others that we think have a path and have the votes ultimately to get approved here," Darin said.
"We're encouraged by the signs that we're seeing in Washington, DC, that there truly is bipartisan support for sensible reforms. It's what the American public wants," he added