After the market closed on Monday, 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) announced its financial results for the first quarter ended March 31, 2022. 4Front reported that its revenue increased 13% year-over-year to $26.1 million. Like other cannabis companies, the first-quarter revenue for 4Front fell from the fourth quarter’s revenue of $28.5 million.
The net losses were trimmed to $5.8 million from last year’s $11 million for the same time period. The earnings per share improved to ($0.01) from last year’s ($0.02) for the same time period.
“Our business inflected during the first quarter of 2022 as a result of the investments and efficiencies we made over the last 18 months to meet our long-term strategic goals,” said Leo Gontmakher, Chief Executive Officer of 4Front. “We now have a fully-capitalized infrastructure in place to drive robust growth through this year and well into the future. Our thesis of providing consistent, low-cost production at scale continues to play out as designed, with the operational achievements from 2021 continuing to provide a solid foundation for the expected growth of our production and sales.”
4Front said it continues to believe that wholesale growth in both Massachusetts and Illinois is poised to strengthen over the year as additional retail comes online in those underserved states. As of March 31, 2022, the company had $8.6 million of cash and $48.7 million of related-party long-term debt not due until May 2024. This is a big drop from the fourth quarter’s ending cash balance of $22 million.
Gontmakher added, “Our retail operations are showing solid performance, with increasing customer counts despite some expected pricing headwinds. Additionally, our cultivation and manufacturing processes and facilities are now fully optimized for the large-scale production of high-quality, low-cost products. The acquisition of NECC and its state-of-the-art facility, the best we have ever seen, has contributed to improvements not only in Massachusetts, but across our platform as we further implement their practices into our own process. The resulting high-quality flower has enabled increased sales of our house brands and further penetration into wholesale markets.”
“In California, we were proud to announce the acquisition of Island at the end of March and its subsequent closing in April. The Island brand and their seasoned management team are perfect complements to the 4Front model, and since closing the transaction we have fully integrated Island into our production and distribution channels. The scale of our Commerce operations enables us to buy similarly successful, attractive brands and manufacture them at considerably lower cost, producing strong margins which fall right to our bottom line. We look forward to announcing more exciting developments in California over the coming months.”
“We’re excited to set up our next stage of growth in Illinois, with the first phase of our latest facility in Matteson expected to be completed in six months and ahead of schedule. I am confident that with the completion of the Matteson facility on the near horizon, and a fully operational Commerce facility showing strong sales momentum, we are fully prepared for our next stage of growth as a business.”