The relatively frugal Grown Rogue International Inc. (CSE: GRIN) (OTC: GRUSF) found free positive cash flow and meaningful growth in Oregon and Michigan last year despite persistent headwinds throughout the cannabis industry.
The craft cannabis company released its financials for the 12-month period leading up to Oct. 31, 2022.
Grown Rogue saw $17.8 million in total revenue at the end of the fiscal year, an 89% improvement from the $9.4 million in the company’s fiscal 2021.
In Oregon, revenue rose 72% to $8.9 million versus $5.2 million in the previous fiscal year. Michigan’s earnings fared even better, as the company’s revenue in the state jumped 129% versus 2021’s annual financials ($8.9 million versus $3.9 million).
The company also reported that it had retained $419,951 in net income.
In a statement, CEO Obie Strickler said that the latest results “continue to show our ability to carefully and profitably scale our business,” such as being free cash flow positive and managing an 89% rise in adjusted EBITDA.
Grown Rogue has held the crown for the top flower brand in Oregon for six consecutive quarters leading up to the end of the fiscal year, according to LeafLink’s MarketScape data. In Michigan, the company more than doubled its production rate versus 2021 and is the 10th largest wholesale flower brand in 2022.
Strickler noted that Grown Rogue’s more prudent short-term goals fit the mold of the long-term upside the company hopes strict use of resources can maintain.
“I want to note that many previously insulated markets are beginning to experience price normalization which we have long been familiar with in our home state of Oregon and now Michigan,” he said.
But, he added, “even in markets where prices have fallen from their highs, they are still significantly above prevailing Oregon and Michigan pricing. This normalization has created distress among companies which cannot operate at prices we are comfortable with, and this distress has, in turn, lowered asset prices creating new and exciting opportunities for us.”
Last month, Grown Rogue’s subsidiary received regulatory approval from the Michigan Cannabis Regulatory Agency to acquire a majority stake in a company that owns a 60% controlling interest in Golden Harvests LLC.
Golden Harvests was one of the first licensed Michigan operators to receive a Class C grow license in late 2018, with their first harvest in the spring of 2019.
The CEO noted that a $2 million financing deal it struck in the fourth quarter reinforced its search for a new market to enter.
“Our capital allocation is guided by our disciplined search for the most compelling ways of entering new markets where the ‘Grown Rogue Way’ will be successful,” Strickler said.