Red White & Bloom Misses Audit Target

Red White & Bloom Brands Inc. (CSE: RWB)(OTC: RWBYF) slid in late trading on Monday after further auditing delays postponed the release of key financial report cards for the second time this year. The company released the news after the markets closed on Friday and on a week when it was expected to deliver its financial numbers.

The company has seen significant restructuring moves as it looks to balance its sheets and cut down on costs after a looming mountain of debt threatened gains last year. The changes have concentrated on selling its Illinois property, paying down debt, reducing its headcount, and focusing on its own brands – according to RWB CEO Brad Rogers, who oversaw the restructuring of debt worth $115 million due this year.

“We have reduced well over $100 million of liabilities without any dilution to our shareholders and have exited the one state that had not contributed any revenue from THC operations to our results since our inception,” he said in an April release.

The company applied to extend its existing MCTO, which prevents management trading after auditing partner Macias Gini & O’Connell LLP informed RWB about the delay. RWB set a new July 29, 2022 expected deadline for the release of their postponed Q1, 2022, and 2021 annual filings.

Signs of Trouble

Back in April, Red White & Bloom announced a series of transaction and operational decisions to strengthen the balance sheet and provide significant cost reductions in 2022. The company sold its Granville, Illinois greenhouse, associated real estate, and certain greenhouse equipment to New Branches of California for a total cash purchase price of C$56.1 million. In connection with the closing, the company repaid its secured lender $51.7 million from the proceeds and certain other accrued liabilities totaling approximately $3.8 million.

In addition, the company decided to pivot to an asset-light, brand-rich, model in the State of Illinois and will no longer pursue its own THC license through its previously announced definitive agreement to acquire a cultivation license in Shelbyville, Ill. “We still believe that Illinois could be a great market for us, and will look to pursue it from an asset-light approach through licensing of our own brands,” Rogers noted at the time. “We strengthened RWB further with the reduction of $6+ million of interest expense and the streamlining of our operations. We see the potential for additional synergies as we integrate the PharmaCo operations into the organization.”

RWB has made a series of strategic changes, including the reduction of headcount and rationalization of various suppliers and consultants. The company has eliminated over $2.5 million through these reductions on an annualized basis and expects similar cost savings through its strategic review of consultants and contractors.

 

Adam Jackson

Adam Jackson covers the cannabis industry for The Green Market Report. He previously covered the Missouri statehouse for The Columbia Missourian and has written for The Missouri Independent. He most recently covered retail, restaurants, and other consumer companies for Bloomberg Business News. You can find him on Twitter @adam_sjackson and email him at adam.jackson@crain.com.


FundCanna

One comment

  • Daniel Njuguna

    July 19, 2022 at 3:48 am

    I would like to work in the cannabis field
    We in Kenya are very green in this project
    Best
    Regards
    Daniel Njuguna

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 22 hours

New Colorado Rules: More Packaging Mandates, But Also Supply Chain Flexibility

@GreenMarketRpt – 22 hours

Michigan Gov. Whitmer Makes Marijuana Top Cop’s Role Permanent

@GreenMarketRpt – 1 day

Michigan Man Who Halted Some NY Licensing Suing Los Angeles

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.