Col-Care Archives - Green Market Report

Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF)  reported financial results for the first quarter ended March 31, 2022. Revenue for Columbia Care fell sequentially by 11% to $123 million from $139 million in the fourth quarter. It was a 43% increase over last year’s revenue of $86 million for the same time period. It missed the Yahoo Finance average analyst estimates for revenue of $138 million.

The net loss was trimmed slightly to $27 million from last year’s $29 million for the same time period. The earnings per share were ($0.07) versus last year’s ($0.10). This was in line with analyst expectations.

“The results of the first quarter of 2022 demonstrate how Columbia Care overcame a number of macro-economic headwinds by exercising strong operational discipline. We materially increased our gross and EBITDA margins, as we continued leveraging the scale we have built across our strategic national platform. During the first quarter, we drove a revenue increase of 43% over the prior year, achieved nearly 700 basis points of improvement in Adjusted Gross Margin and more than 930 basis points in Adjusted EBITDA Margin. As our recent capital investments yield enhanced efficiencies throughout the value chain, this will not only allow us to capitalize on our growth opportunities throughout the country, but continue to further improve profitability,” said Nicholas Vita, CEO of Columbia Care. “As 2022 continues to unfold, our priority is on driving profitability. We expect market specific cyclicality to be surpassed by the standout growth in several key markets in our diversified portfolio. Having new, high growth markets come on line, beginning in 2Q, will provide a strong counterbalance as several maturing markets show the impact of inflationary and competitive pressures.”

Top Markets

Col-Care noted that its top five markets by revenue in the quarter were California, Colorado, Massachusetts, Pennsylvania, and Virginia. Virginia is now a top market for both revenue and Adjusted EBITDA with four active retail locations, with significant expansion of the medical program to begin July 1. Col-Care opened 5 additional retail locations in the quarter: four in West Virginia and one in Virginia Beach, VA to bring active total to 84. Additional dispensaries in development include eight in Virginia, one in West Virginia, and one in New Jersey.

Vita continued, “We are excited about recent achievements and progress thus far in 2022, including our fourth dispensary in the rapidly expanding market of Virginia, opening four retail locations and launching the leading wholesale operation in West Virginia, and the launch of adult-use in New Jersey in mid-April. As we look ahead to the remainder of the year, we are leaning into the markets that will propel growth such as New Jersey, Virginia, West Virginia, and New York, making ongoing operational improvements to drive efficiencies in new and maturing markets, and focusing on driving free cash flow to fund our growth strategy. We also remain determined to deliver the best outcome for our stakeholders as we progress towards a successful close of the transaction with Cresco Labs, with the shared vision of creating the definitive market leader in the cannabis industry.”

Outlook

Columbia Care said that it expects revenue in 2022 to range between $625 million and $675 million. At this time, the company said its 2022 outlook does not include any contribution from future acquisitions, nor does it assume any additional changes in the regulatory environment in markets where Columbia Care currently operates or the anticipated impact of the pending Cresco Labs transaction. This also excludes potential future market changes where a conversion from medical-only to adult-use is under consideration by a governor and/or legislature.

Columbia Care Inc. (CSE: CCHW) (OTCQX: CCHWF) has completed a private placement of $185 million in 9.50% senior-secured first-lien notes due 2026. Columbia Care said it would use the money to fund capital expenditures, strategic acquisitions and for general corporate purposes.

“This non-dilutive financing provides Columbia Care with additional flexibility to continue executing on our strategic growth initiatives, especially in markets like New Jersey, New York and Virginia, where we are serving a growing number of medical patients and preparing for adult use on the horizon. We have reduced our overall cost of capital and are grateful to our investors who recognize our improved credit profile and understand the catalysts ahead,” said Nicholas Vita, CEO of Columbia Care.

In addition to the offering, the company said it had received binding commitments to exchange approximately $31.75 million of its existing 13% senior secured notes due 2023 for an equivalent amount of 2026 Notes plus accrued but unpaid interest and any negotiated premium thereon. As a result of the note exchanges, Col-Care said it has received roughly $153,250,000 million in cash.

The deal comes not long after Col-Care named Derek Watson as its Chief Financial Officer. Watson came with more than 30 years of finance and leadership experience, including in strategy, investor relations, information technology, tax, treasury, accounting, financial planning and analysis, operational improvement, and risk management.

“The search for our new CFO was a highly-selective and competitive process. This role is pivotal to our growth and will be the most important leadership position as we navigate what the future holds for banking, investments, and funding in the cannabis industry. We have found the right match in Derek and are thrilled to welcome him on board next week. His decades of experience will serve him well, and his hands-on dedication to collaboration and innovation are exactly what we need in a CFO to take us into the next phase of our company,” said Vita.

The company will report its financial results for the fourth quarter and full year ended December 31, 2021 after US financial markets close on Tuesday, March 15, 2022. In November Columbia Care revised its guidance downward for 2021 to $470M – $485M Revenue, $85M – $95M Adjusted EBITDA and 46% Adjusted Gross Margin for Full Year 2021.

Columbia Care Inc.  (CSE: CCHW) (OTCQX: CCHWF)  reported financial and operating results for the second quarter ending June 30, 2021, as revenue grew 232% to $109.7 million. This was a sequential increase of 19% and in line with the average analyst estimate from Yahoo Finance for revenue of $109 million. Columbia Care noted that the second quarter 2021 results included contributions from Green Leaf Medical as of the date of acquisition, June 10, 2021. With the close of the Ohio acquisition in July, all financial reporting will be consolidated under Reported Results going forward.

The net losses were trimmed to $10 million from last year’s $27 million. The earnings per share improved to ($0.03) from last year’s ($0.11) for the same time period. This missed the estimates for earnings of ($0.02). The company burned through $27 million in cash in the quarter. However, the cash balance is still a very healthy $148 million.

“We are pleased to report another record quarter for Columbia Care as we continue to execute on our strategic initiatives and build scale in markets across the country,” said Nicholas Vita, CEO of Columbia Care. “Our results in the second quarter were driven by organic growth in new and maturing markets, increasing wholesale activity, and contribution from our recently closed acquisition of Green Leaf Medical (gLeaf). We saw continued year over year and sequential improvement in both gross and Adjusted EBITDA margins as we leverage the scale of our national portfolio and ramp in newer markets.”

Columbia Care also stated that its top five markets by combined revenue were: California, Colorado, Massachusetts, Ohio, Pennsylvania. The top five markets by adjusted  EBITDA were: Colorado, Illinois, Massachusetts, Ohio, Pennsylvania.

Vita continued, “The ongoing national rollout of our Cannabist retail storefront, with five Cannabist locations open to date, has been very successful and underpins our ongoing initiative to establish a portfolio of national product brands, beginning with our unique store-based experience. We are pleased to report a record number of new product and brand introductions in our markets, such as Seed & Strain flower and vapes, Triple Seven flower, and Plant Sugar edibles.”

The company reaffirmed its 2021 revenue guidance of $500 – $530 million and adjusted EBITDA guidance of $95 – $105 million. Columbia Care’s said its 2021 outlook is based on current trends and is consistent with the forecast previously provided on March 16, 2021. Columbia Care said its pro forma 2021 outlook does not assume any future changes in the regulatory environment in markets where Columbia Care currently operates.

“Fundamentals continue to improve as we build scale, execute on planned CAPEX expansion projects, and build brand equity at the retail and product levels from coast to coast. We have more growth initiatives underway than ever before, and with New York, New Jersey and Virginia poised to transition to adult use, the opportunities for Columbia Care have never been greater. We have set the stage for a tremendous second half of the year with momentum building into 2022 and look forward to continuing to execute our strategic vision.”