Greenlane Holdings, Inc. (Nasdaq:GNLN) reported financial results for the third quarter ended September 30, 2021, as total revenue increased 16% to $41.3 million versus last year’s $35.8 million. Net losses at Greenlane increased 108% to $$28.7 million versus last year’s net loss of $13.7 million.
Nick Kovacevich, CEO of Greenlane Holdings, said: “Q3 was a transformational quarter for Greenlane, with the completion of our merger with KushCo creating the industry’s leading ancillary cannabis company and house of brands. Our first few months as a combined company have been off to a strong start, as demonstrated through several realized revenue and cost saving synergies, including the consolidation of certain vendors and infrastructure and the development of go-to-market cross-selling strategies across each of our respective platforms. We are extremely pleased with the progress we have made on our integration efforts to date, while simultaneously driving meaningful progression in the business. We also generated another strong quarter of sales for our Greenlane Brands, which, despite the normal and expected challenges of closing a merger, still represented the second-highest quarterly revenue contribution in company history.”
Greenlane said it had reached its second-highest sales level in company history for Greenlane Brands, which grew to $8.4 million in the quarter, up 26% versus $6.7 million in sales for in the same time period in 2020. Greenlane Brands accounted for 20.4% of the quarter’s total revenue compared with 18.7% of total revenue for last year.
Net sales in the U.S. increased 29.4%, to $37.5 million, while net sales for Canada fell to $1 million from last year’s $4.4 million, primarily due to an expected decrease in nicotine sales as a result of the company’s strategic shift away from low-margin nicotine sales. Net sales for Europe increased 21.3% to $2.8 million, primarily due to an increase in B2B and third-party marketplace website sales.
The Company is targeting to achieve $70 million and $100 million in Greenlane Brands revenue for 2022 and 2023, respectively. In addition, the Company expects Greenlane Brands, as a whole, to generate 45% product margins, and to comprise between 22% and 28% of total revenue in 2022.
Kovacevich continued, “Looking ahead, we will continue to build our portfolio of higher-margin proprietary brands, as seen by our recent announcement to acquire leading high-margin vaporizer brand DaVinci, which expands our Greenlane Brands portfolio, and is expected to strengthen our overall margins and profitability in the near-term. With our enhanced operations, customer base, and product portfolio, we are in a stronger position than ever to execute on our growth strategy and drive significant value for our customers, partners, and shareholders.”