4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) released its financial results for the first quarter ended March 31, 2021 with total revenues coming in at $22.9 million versus last year’s $12.6 million for the same time period. Net losses increased from $7.7 million in 2020 to $11 million for the first quarter of 2021. 4Front also reiterated its fiscal year guidance for Pro Forma Revenue of $170 -180 million and Adjusted EBITDA of $40 -50 million.
The company noted that pro forma revenue increased 26% to $31.4 million in the first quarter versus $25.0 million in the fourth quarter. 4Front said that retail sales and product adoption exceeded internal expectations. This increase was attributed to higher sales from the two Massachusetts dispensaries following the start of adult-use sales in the second half of 2020, and a very strong launch from the Calumet City dispensary that opened in December 2020.
“Our strategy of replicating low-cost production methods in new markets began to take shape and grow at scale in Massachusetts, Illinois, and California in our first quarter, extending the momentum we created in 2020,” said Leo Gontmakher, Chief Executive Officer of 4Front. “Utilizing the cultivation and production techniques developed for our facilities in Washington, we have increased the yields and quality of our products produced in both Illinois and Massachusetts, which has enabled us to supply our adult-use dispensaries to meet the ever-increasing demand in those markets. As production increases, we plan to begin selling excess product into the wholesale market as well.”
Mr. Gontmakher added, “Continued positive momentum following the initiation of adult-use sales in late 2020 in both Georgetown and Worcester, Massachusetts, along with an exceptionally strong launch of our Calumet City, Illinois dispensary in December, contributed to our robust sequential Q1 sales increases and exceeded all internal expectations. Looking ahead, with the completion and opening of our manufacturing facility in Commerce, California just a few weeks out, we expect to be in the market imminently with our suite of high-quality, branded products. As the largest legal cannabis market in the world, California offers a unique opportunity to build efficient operations and create incredible products that are replicable across our nationwide footprint.”
4Front said in a statement that its 170,000 square foot manufacturing facility in Commerce, California is nearing completion and remains on track to be ready to serve the California cannabis market beginning in the second quarter. The company’s first suite of products will include edibles, tinctures, capsules and infused pre-rolls, including Marmas, Pebbles, Chewees, Hi-Burst, Verdure and Terp Stix. The company has signed a distribution agreement with Nabis, a leading distributor of cannabis products.
Construction of the third Massachusetts Mission Dispensary in Brookline is complete. Pending final approval from the Cannabis Control Commission, the grand opening is slated for June 2021. In Illinois, the recently announced development of our new cultivation and production facility continues as scheduled with construction beginning in the third quarter. The first phase, a 258,000 square foot building with 65,000 square feet of flowering canopy and approximately 70,000 square feet of manufacturing space is on track to break ground in Q3 2021.
Mr. Gontmakher concluded, “With revenue-generating operations now in California, Illinois, Massachusetts, Michigan, and Washington, we are poised to further scale the business according to our expansion strategy for 2021. We continue to track towards our stated financial guidance for the year, anticipating $170 – $180 million in Pro Forma Systemwide Revenue and $40 – $50 million in Adjusted EBITDA.”