Fire & Flower Holdings Corp. (OTCQX: FFLWF) announced its financial results for the fiscal second quarter ending July 31, 2021, as revenue rose 51.4% to $43.3 million over last year’s $28.6 million. Fire & Flower delivered a net income of $19 million versus last year’s net loss of $29 million.
“This quarter we continued to execute on our overall business strategy as our revenues increased 51% year-over-year to $43.3 million,” said CEO Trevor Fencott. “Also, we successfully laid the foundation of our expanded digital strategy in the second quarter as we strengthened key partnerships and began recognizing the full value of our Hifyre digital platform.”
Same-Store Sales Drop
Digging into the company’s earnings, retail revenue rose by 36.3% year-over-year to $31.8 million. However, in troubling news, the company noted that same-store sales decreased 14% for forty-eight (48) stores in operation during the comparable period in Q2 2021 due to a surge in newly licensed retail cannabis stores in Ontario, from 665 on May 1, 2021, to 981 at July 31, 2021. Fire & Flower contributed to the surge by opening seven new stores in Canada, bringing total stores to 91. In early June 2021, the Ontario cannabis market opened up from lockdown due to COVID-19, allowing for foot traffic into all Fire & Flower retail stores.
Fire & Flower said that wholesale revenue increased by 81.3% year-over-year to $7.8 million. The digital platform had a much smaller contribution but higher growth as the Hifyre revenue increased 292.6% year-over-year to $3.7 million.
Looking To America
It seems that with the Canadian market showing signs of limitations, Fire & Flower has its future sights set on America. The company entered a partnership with Humble & Fume to offer an expanded catalog of its portfolio of products to Fire & Flower customers across North America both online and in-store. The company also entered the California market through a strategic licensing agreement with American Acres (now called Fire & Flower U.S. Holdings) and the opening of a Palm Springs branded Fire & Flower store. In addition to that, the company has continued with its Nasdaq application and has targeted the fourth quarter 2021 for its U.S. listing.
Fencott added, “As our financial results demonstrate, our Hifyre business segment is growing at a rate significantly greater than past quarters and is now driving new opportunities for total revenue growth and stronger EBITDA. Our growth is focused on building upon these opportunities, white-labeling our e-commerce platform to drive additional high-margin revenue streams and capture new customers through our announced acquisitions of Wikileaf and PotGuide. We continue to successfully execute an e-commerce model unlike any of our competitors as we drive our leadership position in the global cannabis retail industry.”