Curaleaf, one of the world’s largest cannabis companies, is exiting the adult-use cannabis retail market in Maine with the sale of its licensed dispensary in South Portland. The company’s sole recreational marijuana shop is being sold to Foliage Cannabis Co., which has already begun operations at the retail location, according to a report in local media.
Online news source Mainebiz reports that Curaleaf and Foliage Cannabis have agreed to the transfer of ownership of the South Portland dispensary, although the terms of the deal have not been released. The retail site will be the second dispensary in Maine for Foliage Cannabis, which operates its original shop in South Portland less than a mile from the new location. Curaleaf continues to operate medical marijuana dispensaries in Bangor, Auburn, Wells and Elsworth, Maine, according to a listing for the state on the company’s website.
A company spokesperson for Curaleaf confirmed the move, writing in an emailed statement that “We exited adult use, but remain in the medical market with four stores and have no plans to exit medical.”
Curaleaf mentioned the transaction on March 6 when it reported results for the fourth quarter of last year. The announcement had few details, saying only that the company had “entered into an agreement to sell our Maine, adult-use store.” In a press release, the company reported it had generated $345 million in revenue in the fourth quarter of 2023, representing an increase of 4% quarter-over-quarter.
Curaleaf’s fourth-quarter financial also reporting shows that the company’s revenue for the year totaled $1.35 billion, up 6% from 2022. Profitability was elusive, however, with the firm showing a 2023 net loss of $281.1 million, the equivalent of 39 cents per share. Curaleaf owns and operates 145 retail cannabis locations in 17 states. Worldwide, the company employs about 5,600 people.
Alexis Soucy, a spokesperson for the Maine Office of Cannabis policy, said that Curaleaf will complete the sale of the retail location once the business has been approved for an active license. The conditional license the shop is operating under is scheduled to expire in October. Until the active license is approved, the two companies have arranged for Foliage Cannabis to use its name and branding at the dispensary to be transferred.
Curaleaf Entered the Maine Rec Market Three Years Ago
Three years ago, Scott Reed, Curaleaf’s general manager in Maine at the time, said that the company had big plans for the state as it entered the recreational market in April 2021.
“We have been proudly serving the Maine medical market with top-quality, locally grown flower, and exceptional customer service for nearly a decade, and we look forward to expanding those offerings to our adult-use customers,” Reed said at the time, according to the report from Mainebiz.
Reed left Curaleaf in July 2022 when the company went through a round of downsizing. He is now the co-owner of Foliage Cannabis Co. with his partner Scott Lever. Together, they’ve been able to independently raise the money needed to open the two retail locations, giving the partners far more flexibility than many other cannabis companies.
“We’re self-funded, so we’re different from a large company with lots of investors,” Reed said. “We can be nimble.”
Earlier this month, the Office of Cannabis Policy released data showing that the state’s retailers rang up $18.01 million in recreational marijuana sales last month, a figure that was up 28.3% from the $14.05 million in sales in February 2022.
Despite the success of Maine’s adult-use cannabis industry as a whole, the picture isn’t as rosy for some companies in the market. A total of 20 licensed businesses including 11 cultivation sites, four manufacturing facilities and five retail dispensaries exited Maine’s recreational marijuana market in 2023.
Overall, however, the industry is still growing. Despite the shuttered companies, the number of cultivation sites in Maine remained stable from 2022 to 2023, while the number of retailers increased by 27 and the number of manufacturers rose by 13.
Curaleaf’s exit from Maine is not the first time the company has left a state’s recreational cannabis market. In January 2023, Curaleaf announced that it was leaving the mature markets of California, Oregon and Colorado. That announcement was followed by the company’s exit from adult-use cannabis markets in Michigan and Vermont.
Curaleaf executive chairman Boris Jordan said during a third-quarter investor conference call in November that the company is exiting “low-margin, low-growth” markets it now serves in a bid to improve profitability.
“Throughout 2023, the company’s been focused on improving efficiency metrics and dialing in operations to maximize its existing base,” Jordan said, according to a report from Cannabis Business Times. “We have taken significant steps to eliminate redundancies, strategically reduce headcounts [and] exit unprofitable markets. Most of these actions occurred in the first half of the year. And in the third quarter we took the final steps in our asset optimization plan.”