Red White & Bloom Takes Hit on PharmaCo Deal

CEO Brad Rogers expressed optimism about the company's growth.

Red White & Bloom Brands Inc. (CSE: RWB) (OTC: RWBYF) filed its consolidated audited financial statements on Tuesday, signaling progress towards the lifting of the cease trade order by the British Columbia Securities Commission.

Despite the delays, the Toronto-based company said it expects to complete the required filings and disclosures for the first quarter of 2023 by May 30. The order was implemented on May 8 due to delays in the company’s year-end audit.

Fourth Quarter Results

The company reported that in the fourth quarter, revenues were $16.5 million, a $14 million increase from last year’s fourth quarter revenue of $2.5 million. Operating expenses were $10.3 million, a $15.2 million increase from last year. Losses from operations before other expenses (income) were $3.4 million in the quarter.

Other expenses in the quarter were $213.2 million, an increase of $224.7 million from 2021. Included in other expenses for the fourth quarter of 2022 are non-cash charges for intangible assets and goodwill impairments totaling $214.8 million.

PharmaCo Hit

In February 2022, Red White & Bloom closed its acquisition of PharmaCo. Revenue of PharmaCo after the acquisition date at the end of 2022 amounted to $22.6 million.

Net loss for the year was $173.9 million, which included a goodwill impairment of $174.1 million.

If the PharmaCo acquisition had closed on Jan. 1, 2022, the company said in its filing it estimates it would have recorded revenue of $101.5 million and a net loss of $241.5 million, including a goodwill impairment of $174.1 million.

That would have resulted in an increase in revenue of $4 million and a decrease in net loss of $639,429 for the year ended Dec. 31, 2022.

Full-Year Results

For the fiscal year 2022, Red White & Bloom reported revenues of $97.5 million, up by $60.2 million from 2021. The company’s gross profit before fair value adjustments was $27.5 million, a $8 million increase from 2021.

Despite the increase in revenue and gross profit, losses from operations before other expenses were $17.3 million, although this was a decrease of $6.8 million from the previous year.

The company’s most notable financial figure for 2022 is its net loss, which totaled a staggering $245.5 million, a significant increase from $39 million in 2021.

Still, CEO and Chairman Brad Rogers expressed optimism about the company’s growth.

“With the successful launch of our distribution operations in Michigan in January 2022, the closing of our acquisition in Michigan of both retail and cultivation operations, and our continuing focus on expanding our medical retail in Florida, the company is focused on growing market share in its key states,” he said in a statement.

Rogers added that the company is making progress with its asset-light strategies in targeted legal states, incorporating both licensing arrangements and leveraging local execution capabilities in both manufacturing and logistics.

“RWB has now added the states of Arizona and Missouri and continues to proactively negotiate other high-potential, emerging legal markets,” he added.

People Moves

The company implemented a series of changes within its management team to enhance financial and operational efficiencies. These changes include the appointment of Edoardo Mattei as its new chief financial officer in March 2023.

President and director Colby De Zen said the company was focused on “right-sizing” the business during the second half of fiscal year 2022.

“Through the rationalization of operating costs, reduction of debt…restructuring of operations, and key divestitures such as the sale of Mid-American Growers’ assets … significant progress was made,” he said.

During the fourth quarter of 2022, the company made significant strides, securing a lease for a medical retail location in Clearwater, Florida, and launching Platinum Vape product offerings in Arizona.

In March 2023, trading on the OTCQX for the company was suspended, pending the completion of form 20Fs for full-year 2021 and full-year 2022. The company stated that it is working with its advisors to complete the required filings and will work in collaboration with the SEC and the OTCQX to confirm a timeline for reinstatement.

Adam Jackson

Adam Jackson writes about 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 at @adam_sjackson and email him at

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