Mr. Boris Jordan reports

CURALEAF REPORTS THIRD QUARTER 2023 RESULTS

Curaleaf Holdings Inc. today released its financial and operating results for the third quarter ended Sept. 30, 2023. All financial information is reported in accordance with United States generally accepted accounting principles (GAAP) and is provided in United States dollars unless otherwise indicated.

Boris Jordan, executive chairman of Curaleaf, stated: "In the third quarter we took the final steps in our asset optimization plan, and I'm pleased that our changes are showing results. Revenue was $333-million, with adjusted EBITDA margin of 23 per cent. We reduced our inventory by another $18-million this quarter, ending with $118-million in cash on the balance sheet, and generated $33-million in free cash flow from continuing operations. With significant near-term state and regulatory catalysts on the horizon, coupled with our proposed uplisting to the Toronto Stock Exchange and our early mover advantage in Europe, give us great confidence in Curaleaf's future. I am very encouraged by the team's commitment and discipline, and remain bullish for a strong end to 2023 and an exciting 2024."

Matt Darin, chief executive officer of Curaleaf, commented: "The last two quarters have represented an important evolution for us. Along with significant reductions to our expense structure, we scaled back production to accelerate the right-sizing of our inventory while continuing to deliver innovative new products that consumers love. With this progress, along with new wholesale growth opportunities and a return to a decentralized leadership structure, we are turning on idled capacity and are back on offense. The growth catalysts of Germany, New York, Ohio, and potentially Florida and Pennsylvania position Curaleaf incredibly well for years of market share gains."

Third quarter 2023 financial highlights

• Net revenue of $333.2-million excluding $3.5-million from discontinued operations, a year over year increase of 2 per cent compared with Q3 2022 revenue of $325.8-million. Sequentially, net revenue declined less than 1 per cent.
• Gross profit of $150.1-million and gross margin of 45 per cent.
• Adjusted gross profit of $152.2-million, resulting in adjusted gross margin of 46 per cent.
• Net loss attributable to Curaleaf Holdings, including discontinued operations, of $92.3-million or net loss per share 13 cents.
• Adjusted net loss from continuing operations attributable to Curaleaf Holdings of $70.8-million or adjusted net loss per share of 10 cents.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $75.3-million or 23 per cent of revenue.
• Exited direct operations in Michigan and Kentucky resulting in a $22-million non-cash impairment charge and $3-million in adjusted EBITDA accretion.
• Cash at quarter-end totalled $118.1-million.
• Free cash flow from continuing operations of $33.4-million.

Nine months ended Sept. 30, 2023

Financial highlights

• Net revenue of $1,001.4-million, a 7-per-cent increase year over year.
• Gross profit of $458.3-million and gross margin of 46 per cent.
• Adjusted gross profit of $464.7-million, a 9-per-cent decrease year over year.
• Adjusted gross margin of 46 per cent.
• Operating cash flow of $73.0-million.
• Net loss attributable to Curaleaf Holdings of $218.0-million or net loss per share of 31 cents.
• Adjusted net loss attributable to Curaleaf Holdings of $178-million or net loss per share of 25 cents.
• Adjusted EBITDA of $221.9-million or 22 per cent of revenue.

Third quarter 2023 operational highlights

• In Connecticut, the company opened its third and fourth store for adult-use sales in Groton and Manchester.
• Successfully launched adult-use sales in Maryland across the company's four stores and wholesale, realizing triple-digit sequential revenue growth throughout the quarter.
• Entered into an agreement to sell the company's Oregon assets.
• Consolidated grow processor facilities in Nevada from three to one.
• Launched BRIQ, Curaleaaf's proprietary two-gram vape hardware, in 11 states which set record-breaking product launch sales.
• Launched Select Liquid Diamonds in Florida and Zero Proof, cannabis-infused drinkables in Illinois.
• Completed the acquisition of EU-GMP (European Union good manufacturing practice) processing assets from Clever Leaves in Portugal to further vertically integrate our European supply chain.
• Began selling edibles to the United Kingdom market.
• Began wholesaling into Poland.
• Raised $16-million (Canadian) through an equity offering of subordinate voting shares which fulfills one of the requirements for listing on the Toronto Stock Exchange.

Post third quarter 2023 operational highlights

• Formally applied to list subordinate voting shares on the Toronto Stock Exchange.
• Entered into an agreement to sell the company's Maine adult-use store.

Total revenue was $333.2-million in the third quarter of 2023, a decrease of 1 per cent from $335.6-million in the second quarter of 2023 and an increase of 2 per cent from $325.8-million in the third quarter of 2022. The company's year-over-year revenue growth primarily reflects continued growth driven by strength in Maryland, Connecticut and New Jersey, contributions from the Tryke acquisition, and the company's international segment.

Retail revenue was $273.2-million, compared with $275.5-million in the second quarter of 2023, and up 6 per cent from $258.2-million in the third quarter of 2022. Retail revenue represented 82 per cent of total revenue. Curaleaf's year-over-year retail revenue growth was supported by product expansion, new store openings and the further expansion of adult-use cannabis around the country.

Wholesale revenue was $58.6-million, remained flat from the second quarter of 2023 and represented 18 per cent of total revenue. Wholesale revenue declined 12 per cent year over year due to a pro-active reduction of inventory.

Net loss attributable to Curaleaf Holdings was $92.3-million, compared with a net loss of $74.3-million in the second quarter of 2023 and $51.4-million in the third quarter of 2022. The year-over-year degradation in net loss was mainly due to gross margin compression and the increase in total other expenses.

Total revenue for the nine months ended 2023 was a record $1,001-million, an increase of 7 per cent from $935-million for the nine months ended 2022.

Retail revenue was $820-million for the nine months ended 2023, an increase of 12 per cent from $729-million for the nine months ended 2022. The increase in retail revenue was primarily driven by the expansion of product lines into new markets, new store openings and the addition of Tryke.

Wholesale revenue was $177-million, a decrease of 13 per cent from $203-million for the nine months ended 2022. The decline in wholesale revenue was primarily due to price compression and actions to reduce inventory.

Net loss, attributable to Curaleaf Holdings, for the nine months ended Sept. 30, 2023, was $218-million, compared with a net loss of $110-million for the nine months ended Q3 2022. The $108-million degradation in net loss year over year was primarily due to gross margin compression and the increase in total other expenses.

Balance sheet and cash flow

As of Sept. 30, 2023, the company had $118.1-million of cash and $584.6-million of outstanding debt net of unamortized debt discounts.

As of the end of the third quarter, Curaleaf has invested $49.4-million, net in capital expenditures, focused on cultivation, processing and selective retail expansion in strategic markets. During the third quarter, net capital expenditures were $13.6-million.

Shares outstanding

For the third quarter of 2023 and 2022, the company's weighted average subordinate voting shares plus multiple voting shares outstanding amounted to 725,319,477 and 709,638,533 shares, respectively.

Conference call information

The company will host a conference call and audio webcast for investors and analysts on Thursday, Nov. 9, 2023, at 5 p.m. ET to discuss Q3 2023 earnings results. The call can be accessed by dialling 1-844-512-2926 in the U.S., internationally 1-412-317-6300 or from Canada 1-416-639-5883. The conference ID is 5965371.

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 6181764.

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 Nov. 9, 2023, and will end at 11:59 p.m. ET on Nov. 16, 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, the company's brands are sold in 17 states with operations encompassing 146 dispensaries and employing more than 5,200 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.

We seek Safe Harbor.