4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021. The company reported that GAAP revenue increased 68% year-over-year, and 10% sequentially to $28.5 million in the fourth quarter. 4Front did not disclose whether it had a net loss or income for the quarter, while it did say adjusted EBITDA for the quarter was $13.2 million, up 160% from the same time period in 2020.
For the full year of 2021, GAAP revenue increased 81% year-over-year to $104.6 million. The net loss reported by 4 Front was $34.9 million for the year, an improvement over 2020’s net loss of $47 million. The company also said that cash flow from operations increased to $7.4 million in FY 2021 as compared to a loss of $14.0 million in FY 2020.
“Our fourth-quarter results showed strong year-over-year growth, representing steady execution in the face of macro headwinds and reinforcing our thesis of consistent, low-cost production at scale,” said Leo Gontmakher, Chief Executive Officer of 4Front. “2021 saw substantial operational achievements within our company which continue to set the stage for a considerable ramp in production and sales growth through 2022 and beyond.”
In the fourth quarter, 4Front announced its proposed acquisition of NECC, which was subsequently completed in late January 2022 following approval by the Massachusetts Cannabis Control Commission. The acquisition of NECC’s state-of-the-art 55,000 square foot cultivation and production facility significantly bolsters 4Front’s strategic position in the core Massachusetts market and expands the Company’s institutional knowledge of lighting, airflow, and fertigation techniques. The transaction enables the broader penetration of 4Front’s diverse range of low-cost, high-quality products and brands, and increases its scale to enable wholesale operations in the state.
“Revenue growth in our Massachusetts operations will be greatly bolstered by the closing of the acquisition of New England Cannabis Corporation (‘NECC’) in late January, which more than doubled our total flowering canopy and nearly tripled our kitchen, processing and distribution space. Additionally, the cultivation practices developed by the NECC team were already operating at what we believe to be the industry’s highest standards. Coupled with our advanced production methodologies, we believe we will be a formidable wholesaler in the competitive Massachusetts market. As the integration of NECC continues to ramp over the coming weeks, we are intent on further increasing the market penetration of our award-winning brands in the state in the near term.”
Earlier today, 4Front announced it was buying Island Cannabis Co. for an undisclosed amount.
“This acquisition of Island is the first step of a broader California strategy that supports our earlier decision to construct what we believe is one of the cannabis industry’s largest and most efficient processing centers,” said 4Front CEO Leo Gontmakher. “Island is widely recognized for its high-quality, diverse line of pre-rolls, flower and infused products, and has been remarkably successful in building a loyal following in the extremely competitive California market. Once integrated into 4Front’s Commerce facility, we can reduce production costs and scale volume of the Island Cannabis Co. brand. This will accelerate Island’s growth by making a respected brand even more attractive to California retailers and consumers. We are also ecstatic to have Founder and CEO, Ray Landgraf, COO, Brandon Mills, and the Island leadership team join the 4Front family. We believe our Company’s success in acquiring and retaining talent to our management team is imperative to value creation.”