Mr. Boris Jordan reports

CURALEAF REPORTS FIRST QUARTER 2023 RESULTS

Curaleaf Holdings Inc. today released its financial and operating results for the first quarter ended March 31, 2023. All financial information is reported in accordance with United States generally accepted accounting principles (GAAP) and is provided in U.S. dollars unless otherwise indicated.

Executive chairman Boris Jordan said: "Two thousand twenty-three is off to a strong start for Curaleaf, with first quarter year-over-year revenue growing 14 per cent to $336.5-million, beating our guidance of low double-digit growth. Adjusted gross margin was 48 per cent and adjusted EBITDA margin was 22 per cent. We ended the quarter with $116-million of cash on our balance sheet and generated $31-million in operating cash flow from continuing operations. We continue to optimize our U.S. assets for responsible growth and are very excited about the investments we are making internationally, setting the stage for robust growth in '24, '25 and '26 as cannabis adoption accelerates across Europe. We've entered 2023 from a position of strength with ample cash on hand, and will be investing in our business, setting us up for years of market share expansion."

Matt Darin, chief executive officer of Curaleaf, stated: "Since I moved into the CEO role one year ago we've moved decisively to maximize opportunities in high-growth markets while scaling back from unprofitable markets. We are laser focused on operating efficiencies in every aspect of our business both in the U.S. and Europe, establishing a lean asset base from which we will drive margin improvements, operating leverage and cash generation. Our focus is on profitable, responsible growth as we continue to innovate new products, strengthen our brand portfolio and deliver a best-in-class retail experience."

First quarter 2023 financial highlights

• Net revenue of $336.5-million, a year-over-year increase of 14 per cent compared with Q1 2022 revenue of $296-million, which excludes discontinued operations;
• Gross profit of $160.8-million and gross margin of 48 per cent;
• Adjusted gross profit net of add-backs of $162-million, adjusted gross margin of 48 per cent;
• Net loss attributable to Curaleaf Holdings, including discontinued operations, of $54.4-million or net loss per share of seven cents;
• Adjusted net loss from continuing operations attributable to Curaleaf Holdings of $46-million or adjusted net loss per share1 of five cents;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $73.2-million or 22 per cent of revenue;
• Cash position at quarter-end totalled $115.8-million.

First quarter 2023 operational highlights

• Exceeded expense reduction plan by $20-million to realize annual gross run rate savings of $60-million;
• Opened three additional dispensaries in Florida, totalling 58 in the state;
• Pro-active closures of operations in California, Colorado and Oregon which will result in anticipated costs savings and an improved inventory position;
• Launched JAMS, a flavour-forward cannabis edibles brand designed to meet the needs of new cannabis consumers, in Arizona and Florida;
• Expanded Grassroots and Find brands to New Jersey and B Noble brand to Florida;
• Began adult-use sales cannabis at Stamford and Hartford, Conn., locations;
• Closed Amesbury facility in Mass., repurposed the Bellmawr facility in New Jersey, and closed the Homestead outdoor grow in Florida, three older sites that have been replaced by newer, more efficient facilities.

Post first quarter 2023 operational highlights

• Completed the acquisition of Deseret Wellness in Utah, giving Curaleaf three additional stores for a total of four in a market of 15;
• Continued to strategically expand retail footprint in Florida, opening two additional stores reaching 60. As of May 17, 2023, Curaleaf retail operations totalled 152 nationwide;
• Achieved record breaking sales on four/20, led by New Jersey sales marking a 77-per-cent increase over 2022 and single highest day of sales in New Jersey ever;
• Launched new Curaleaf mobile app and loyalty program which has 1.9 million members to date;
• Expanded Grassroots brand to Florida.

Total revenue was a record $336.5-million in the first quarter of 2023, a decrease of 2 per cent from $344.9-million in the fourth quarter of 2022 and an increase of 14 per cent from $296.1-million in the first quarter of 2022. The company's year-over-year revenue growth primarily reflects continued organic growth driven by new retail store openings and the significant focus on research and development, resulting in the introduction of 171 products in 2022, three new brand launches, and the contributions from Tryke and Four 20 Pharma.

Retail revenue was $273.0-million, compared with $276.5-million in the fourth quarter of 2022, and up 21 per cent from $225.1-million in the first quarter of 2022. Retail revenue represented 81 per cent of total revenue. Curaleaf's year-over-year retail revenue growth was supported by 28 new stores added in 2022, and the further expansion of adult-use cannabis around the country.

Wholesale revenue was $62.1-million, a decrease of 8 per cent from the fourth quarter of 2022 and represented 18 per cent of total revenue. Wholesale revenue declined 11 per cent year over year due to price compression, a pro-active reduction of wholesale accounts in California, Colorado and Oregon, and an intentional reduction of low profit raw material sales.

Net loss attributable to Curaleaf Holdings was $54.4-million, compared with a net loss of $260.3-million in the fourth quarter of 2022 and $36.5-million in the first quarter of 2022. The year-over-year degradation in net loss was mainly due to reduced gross margin rate stemming from price compression.

Balance sheet and cash flow

As of March 31, 2023, the company had $115.8-million of cash and $593.8-million of outstanding debt net of unamortized debt discounts.

During the first quarter of 2023, Curaleaf invested $26.0-million, net in capital expenditures, focused on cultivation, processing and selective retail expansion in strategic markets.

Shares outstanding

For the first quarter of 2023 and 2022, the company's weighted average subordinate voting shares plus multiple voting shares outstanding amounted to 718,117,628 and 708,897,273 shares, respectively.

As of March 31, 2023, and Dec. 31, 2022, the company's issued and outstanding subordinate voting shares plus multiple voting shares amounted to 718,611,821 and 717,490,830 shares, respectively.

Conference call information

The company will host a conference call and audio webcast for investors and analysts on Wednesday, May 17, 2023, at 5 p.m. ET to discuss Q1 2023 earnings results. The call can be accessed by dialling 1-844-512-2926 in the United States, internationally 1-412-317-6300 or from Canada 1-416-639-5883. The conference ID is 5395830.

A replay of the conference call can be accessed at 1-877-344-7529, or internationally 1-412-317-0088, or from Canada 1-855-669-9658 using the replay ID 2106379.

A webcast of the call can be accessed on the investor relations section of the Curaleaf website. The teleconference will be available for replay starting at approximately 7 p.m. ET on May 17, 2023, and will end at 11:59 p.m. ET on May 24, 2023.

About Curaleaf Holdings Inc.

Curaleaf Holdings is a leading international provider of consumer products in cannabis with a mission to enhance lives by cultivating, sharing and celebrating the power of the plant. As a high-growth cannabis company known for quality, expertise and reliability, the company and its brands, including Curaleaf, Select and Grassroots provide industry-leading service, product selection and accessibility across the medical and adult-use markets. In the United States, Curaleaf currently operates in 19 states with 152 dispensaries and employs nearly 5,500 team members. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Canadian Securities Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF.

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