Toronto-based Golden Leaf Holdings (GLDFF) reported its second quarter earnings on Tuesday with net revenue falling to $2.1 million from $2.5 million for the same time period in 2016. The 9% decline was blamed on supply constraints across the company’s portfolio.
The net loss for the second quarter was $1.7 million, which was higher than last year’s loss of $1.1 million for the same time period. Gross profits improved to $402,124 from last year’s $217,300.
“It is a key corporate objective for Golden Leaf to establish a greater retail presence, driven by the acquisition of Chalice Farms. We expect this will deliver higher operating margins for the Company, as well as from a proven, retail-focused operating blueprint to successfully broaden Golden Leaf’s market share and to capitalize on the substantial growth opportunity that lies before us,” said Mr. William Simpson, the new Chief Executive Officer of Golden Leaf. “To kick start our strategic plan, we undertook a comprehensive review of the business to identify opportunities to streamline costs. Already, we have made reductions to the work force and have made progress toward consolidating all corporate and commercial operations to Portland, Oregon. These steps are expected to improve our cost structure while maintaining the capacity to support our core expansion strategy.”
Golden Leaf is consolidating its headquarters to Chalice Farms in Portland OR and constructing a processing facility. Three dispensaries are under construction in Oregon and should be opened in the first quarter of 2018. In Nevada, Golden Leaf expects to begin sales of its cannabis brands to dispensaries in Nevada before the end of 2017. In Canada, the company expects to close on the acquisition of MMGC by the end of the third quarter and begin to grow operations shortly thereafter. It expects to launch retail operations in Canada in the second quarter of 2018.
As a result of all these acquisitions, operating expenses jumped to $3 million from last year’s $2.5 million. This month Golden Leaf entered into a private placement transaction with Canaccord Genuity for C$10 million and C$2 million in bridge loan financing.