Goodness Growth Holdings Inc. (CSE: GDNS) (OTCQX: GDNSF), saw revenue climb 39% in the fourth quarter, which the company’s interim CEO attributes in part to “removal of the negative performance drag” from the former Arizona cultivation facility.
Goodness Growth reported financial results for its fourth quarter and full year ended Dec. 31, 2022.
“Over the past several months we’ve taken considerable measures to improve the strength of our business, including reorganizing our management team with a decentralized approach to our state-based markets and the infusion of new battle-tested talent and resources,” interim CEO Josh Rosen said in a statement.
Fourth-quarter sales were $19 million, up from the $13.7 million reported a year ago. Excluding discontinued operations, sales climbed 55.8% from the previous year.
Of that, $15.2 million is attributable to retail sales, with $2.8 million coming from wholesale transactions.
Despite the positive sales growth, Goodness Growth also saw its net loss edge upward in the fourth quarter, rising 3% to $13.3 million from a year-ago net loss of $12.9 million. The EPS loss was flat at negative 10 cents.
Sales for the full year of 2022 increased 37% percent, year-over-year, to $74.6 million. Net loss for the year increased 26% to $42.5 million.
The increase in sales was primarily driven by growth in Maryland and Minnesota, which saw full-year retail increases of 143% and 72%, respectively.
“Our strong year-over-year same-store sales growth in retail was supported by regulatory catalysts, in particular, the addition of flower in Minnesota in April 2022, which drove overall market growth,” Rosen said. “I’d also highlight that we’re putting meaningful emphasis on more efficiently producing greater amounts of quality or what we refer to as ‘A’ Flower as a core driver of improvement over the coming several quarters.”
As of Dec. 31, 2022, total current assets were $46.7 million, including cash on hand of $15.1 million. Total current liabilities were $29.7 million.
Also on Friday, Goodness Growth announced that it had executed a fifth amendment to its credit facility with its senior secured lender, Green Ivy, an affiliate of Chicago Atlantic.
The amendment removes a required amortization schedule and extends the maturity date of the facility to April 30, 2024. The change reduces required cash outlays for Goodness Growth.
The company is also working on finalizing $10 million in secured convertible loan financing through a separate affiliate of Chicago Atlantic. Preliminary terms for this note include a three-year term and an interest rate of 12%, including 6% paid-in-kind and warrants to purchase 6,250,000 subordinate voting shares of the company.
“Verano’s decision to terminate our transaction put us in a vulnerable position in a challenging capital markets’ environment for cannabis, but we are on a path toward becoming a better credit partner with the actions we’ve taken to improve the strength of the company, and we’re optimistic that likely state-level regulatory catalysts can augment and accelerate our growth and drive improved cash flow generation,” Rosen said of the new arrangements.