U.S. cannabis stocks had an outstanding 2020 thanks to the marijuana boom amid the pandemic. The ramp up of state legalization is aiding sales this year as well. Against this backdrop, Massachusetts-based Curaleaf Holdings (OTC:CURLF) has been my top cannabis pick. It has performed consistently well in its last few quarters, achieving triple-digit revenue growth and positive earnings before interest, tax, depreciation, and amortization (EBITDA) that many of its Canadian counterparts are struggling to achieve.

It is set to report its results from the second quarter ended June 30 on Aug. 9. Investors expect to see another good quarter from this company. Curaleaf's smart and timely acquisitions have led to its quality performance. Let's take a look at what the company has been up to since its last earnings report and what lies ahead.

A cultivator standing in a cannabis field holding a cannabis leaf.

Image source: Getty Images

Curaleaf had an exceptional start to 2021

I won't be surprised if Curaleaf turns in another great quarter. It completed many acquisitions in 2020 that included cannabis manufacturers and dispensaries across the nation, such as Curaleaf NJ, Arrow, MEOT, Remedy, Blue Kudu, and Alternative Therapies Group.

Few of them contributed to its first-quarter performance. Its revenue grew 170% year over year to $260 million. Its retail revenue grew 231% to $188 million, driven by organic growth in its existing stores and contributions from six new stores across Florida, Maine, and Pennsylvania. The company also credited Arizona for a spurt of revenue in the quarter. The state legalized recreational cannabis in January.

Curaleaf's Select brand, a cannabis oil brand that it acquired from Cura Partners in February for $948.8 million, led to a 254% jump in wholesale revenue to $72 million from the year-ago period. The other acquisitions have yet to show their full potential.

This drastic revenue jump led to another quarter of positive EBITDA of $63 million, a 213% year-over-year increase. Consistent positive EBITDA is also a sign that the company is handling its operating expenses well, which is evident from its dip in selling, general, and administrative expenses, minus non-recurring items, which fell to 29% of total revenue from 36% in the year-ago period.

What has Curaleaf been up to since its last earnings release?

After starting 2021 with a bang, the company has been keeping busy expanding to hot and upcoming cannabis markets. On June 24, the company opened its second store in New Jersey. It holds a total of three licenses in the state and expects to open a third store by late summer. 

New Jersey legalized recreational cannabis in February, but retail sales there won't begin until 2022. According to the company, its second cultivation facility in the state is now fully operational and is prepared for both the current medical cannabis and the upcoming recreational markets.

Curaleaf also has a robust market in Arizona, with eight dispensaries and nine licenses. In March, New York legalized recreational marijuana, but retail sales won't begin for a year or two. Curaleaf already holds a place in the New York medical cannabis market with four operating dispensaries. 

New York, New Jersey, and Arizona could be three strong markets that could do wonders for the company's financials in 2022 and beyond. Curaleaf stated in its Q1 earnings call that it expects to earn about $2.1 billion and $5 billion in sales, respectively, from New Jersey and New York each year. 

Curaleaf is also expanding internationally. It is targeting the German medical cannabis market, which is Europe's largest medical cannabis market and could be worth $2.1 billion by 2025, according to the company. In May, Curaleaf launched its medical cannabis products (including a high-THC oil product) in Germany.

There is more upside to this pot stock

Acquisitions have been a driving factor for Curaleaf's revenue and EBITDA growth. In May, it acquired Colorado-based Los Sueños Farms and its related entities, allowing it access to the largest outdoor cannabis cultivation facilities in the country. This facility will give Curaleaf 66 acres of cultivation capacity.

With smart acquisitions and expansion plans Curaleaf is more than prepared to become one of the top contenders in the U.S. cannabis space. It is also on track to achieve its full-year revenue target of $1.2 billion to $1.3 billion. The company's target of achieving "positive net income and positive operating cash flows in the back half of 2021" also seems possible to me.

Wall Street analysts recommend this stock as a buy, and I strongly agree. Curaleaf has a strong market presence with a total of 108 dispensaries, 22 cultivation sites, and 30 processing sites in 23 U.S. states. It holds 32 additional licenses to expand and strengthen its roots nationally.

Even with a limited legal market in the U.S., Curaleaf's stock has soared 103% over the last three years, compared to the S&P 500's gain of about 64%.

CURLF Chart

CURLF data by YCharts

Federal marijuana legalization would just be the icing on the cake for this pot stock. Analysts expect an 87% upside for its share price over the next 12 months, which I think is entirely possible.

With outstanding revenue numbers, positive EBITDA, and rapid expansion, Curaleaf is closer to profitability than ever. That's why this is a cannabis stock to buy and hold for the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.