Halo Collective Inc. (NEO: HALO) (OTCQB: HCANF) announced preliminary unaudited monthly net revenue in August 2021 of approximately $3.9 million. Halo said that this was a 94% increase versus August 2020 and was driven by continued organic growth and increased market penetration in California and Oregon, as well as a contribution from the recent acquisitions of Winberry Farms and the company’s three KushBar retail cannabis stores located in Alberta, Canada. Excluding acquisitions, organic revenue growth was 19% in August 2021 compared to August 2020.
Kiran Sidhu, CEO, and Founder of Halo said, “Our team has stepped up efforts to focus on higher-quality sales throughout the summer and this is driving continued strong revenue growth in August. The expected improvement in gross margins from these initiatives combined with a significant reduction in corporate overhead over the coming quarters should accelerate our path toward profitability as we progress toward our stated goal of being a West Coast operator focused on Oregon and California. As Halo opens dispensaries in Southern California in the later part of 2021, we expect our revenue growth to continue to accelerate.”
In August, Halo said that it was buying Food Concepts LLC, the master tenant of an approximately 55,000 square foot indoor cannabis cultivation, processing, and wholesaling facility in Portland, Oregon operated under the Pistil Point name and the related licenses issued by the Oregon Liquor Control Commission and other operating assets owned by the entities doing business as Pistil Point. Halo said that when the deal is closed, it will be one of the largest indoor growers in Oregon, adding to its current 11 acres of owned and contracted outdoor and greenhouse cultivation.
“With Halo’s acquisition of certain Pistil assets, we now enter the very attractive indoor flower and pre-roll markets in Oregon, which in the flower segment has the highest price point, is the fastest growing, and carries the highest margins,” said Dustin Jessop, Halo’s CRO and Winberry’s Founder. “We plan to greatly expand this capacity from 200 to 500 flowering lights. This acquisition will increase our number-one wholesale footprint in Oregon, giving us the same-day delivery capability to a vast majority of the market. We plan to double our overall production capabilities as well as establish Oregon’s first cash and carry showroom. Once the first showroom is completed, we plan to do the same in Eugene, Bend, and Medford.”
Halo also reported in August that its second-quarter revenue was $9.1 million, up $3.9 million, or 74.3%, compared to $5.2 million in the same period in 2020, including the sale of over 4.3 million grams of cannabis products principally to dispensaries in Oregon and California, a 302% year-over-year increase. Philip Van Den Berg, CFO and Co-Founder said, “The Q2 results demonstrate that we are on track toward our goal of profitability. We are reducing our full-year 2021 revenue guidance from $75 million to $65 million. Our dispensaries should be online over the next 120 days, contributing at a full run rate by year-end. Meanwhile, we expect to improve overall profitability by the opening of our three Los Angeles dispensaries, significantly reducing core U.S. overheads, and executing on the strategic actions related to the Halo Tek and Akanda transactions.”
Halo has also recently announced its intention to reorganize its non-U.S. operations into a newly formed entity called Akanda Corp., whose mission will be to provide high-quality and ethically sourced medical cannabis products to patients worldwide. Akanda will combine the scaled production capabilities of Bophelo Bioscience & Wellness Pty. Ltd., Halo’s Lesotho-based cultivation and processing campus located in the world’s first Special Economic Zone (SEZ) containing a cannabis cultivation operation, with distribution and route-to-market efficiency of Canmart Ltd.