earnings Archives - Green Market Report

Kaitlin DomangueKaitlin DomangueMarch 2, 2021


Canadian cannabis retailer, High Tide Inc., (TSXV: HITI) (OTCQB: HITIF), announced their Q4 earnings yesterday for 2020. Despite the curveballs 2020 threw, High Tide landed on top, and reported a 118% increase in revenue bringing the total to $24.9 million for the fourth quarter. The revenue increase accounted for a 166% year-over-year growth, and brought the year’s total earnings to $83.3 million. 

High Tide’s revenue by geographic location

  • $20.6 million of total company revenue was earned in Canada in Q4
  • $4.1 million of total revenue was earned in the United States in Q4
  • $0.2 million of total revenue was internationally in Q4


  • $68.4 million of total revenue was earned in Canada in fiscal year 2020
  • $14.3 million of total revenue was earned in the United States in fiscal year 2020
  • $0.6 million of total revenue was earned internationally in fiscal year 2020

High Tide’s gross profit increased by 112%

The company’s gross profit increased by 112% to reach $8.7 million in the fourth quarter of 2020, and 172% to $30.8 million for the year. The company’s CEO and President, Raj Grover, said 2020 was their best year yet. “Despite the global slump in retail sales associated with the pandemic, and thanks to the tireless efforts of our team, we closed the year with approximately $8 million in Adjusted EBITDA making 2020 the best year in High Tide’s history,” said Raj Grover, President and Chief Executive Officer. High Tide’s Adjusted EBITDA for the fourth quarter was $3.6 million, and the $8 million represents the fiscal year ended October 31st, 2020. 

High Tide’s cash on hand

The company reported $7.5 million cash on hand as of October 31st, 2020, and a significant cash balance increase to approximately $38 million as of today. 

Revenue segments

  • $22.6 million in total revenue was generated by retail in Q4
  • $2.2 million in total revenue was generated by wholesale in Q4 
  • An immaterial amount by corporate was generated in Q4


  • $75 million in total revenue was generated by retail in fiscal year 2020
  • $7.9 million in total revenue was generated by wholesale in fiscal year 2020
  • $0.4 million in total revenue was generated by corporate in fiscal year 2020 

These figures compare to $24 million, $6.69 million, and $0.6 million, respectively, for the previous year.

More thoughts from High Tide’s CEO 

“We continued to run our operations tightly, ending the year off with the record levels of revenue and Adjusted EBITDA.,” said Grover. “We are excited about our trajectory in the United States and continue to prioritize and look for opportunities in that market. Our integrated value chain which includes Cannabis Bricks & Mortar stores, e-commerce platforms for consumption accessories and hemp derived CBD products, along with manufacturing and distribution of licensed and proprietary consumption accessories, experienced sizable growth on all fronts. We plan to continue to further strengthen our chain through organic growth and strategic acquisitions creating even more value for our shareholders.  Since the end of the fiscal year, we have already nearly doubled our size in Canada with the closing of the META Growth acquisition. For the fiscal first quarter of 2021 we expect to report revenue in the range of $37 million to $38 million.”

Operational highlights

In addition to monetary achievements, High Tide made some operational moves last year to set the company up for success in 2021 and beyond. 

  • Canna Cabana (High Tides retailer) opens location in tourist destination Banff, Alberta in August
  • META shareholders overwhelmingly approve High Tide’s acquisition of META Growth Corp. (META. V) in October 2020
  • Over 50% of the company’s brick-and-mortar revenue came from Cabana Club members, emphasizing the brand’s value 

Additional Events

  • High Tides entered a loan agreement for $6.75 million ending on December 31st, 2024 of an undrawn balance on a $20 million credit facility, which was obtained through the acquisition of META
  • Approximately $29 million worth of company debt was converted into common shares after October 31st, 2020
  • Company common shares moved up to the TSX Venture Exchange
  • The company submitted an initial application to be listed on the NASDAQ 
  • High Tides closed on an unsubscribed bought deal equity financing, gross proceeds $23 million 
  • All branded locations have remained operational throughout the COVID-19 crisis, despite difficult issues facing Canada. 

Debra BorchardtDebra BorchardtFebruary 18, 2021

Tilray, Inc. (Nasdaq: TLRY) reported financial results for the full fiscal year and fourth quarter ended December 31, 202 following the close of the market on Wednesday.
The company said that total revenue increased 20.5% to $56.6 million versus the fourth quarter of 2019. Cannabis segment revenue increased 46% to $41.2 million, mainly driven by the acceleration of International Medical sales (+191%) and Canadian Adult-Use sales (+49%). Canadian medical sales grew 26% and there were no bulk sales to other licensed producers.
The company also delivered a net loss of $(3.0) million, or $(0.02) per share versus the net loss of $(219.8) million, or $(2.14) per share, in the fourth quarter of 2019 and a net loss of $(2.3) million, or $(0.02) per share in the third quarter of 2020. With sales jumping about 46%, driven by international demand, which increased by 191%, Tilray posted a better-than-expected loss of 2 cents per share, which stands in stark contrast to the $2.14 loss at the same time last year.”
Brenda O’Farrell, senior analyst at Investing.com said, “With Tilray poised to become the biggest cannabis company in the world since announcing its merger with Aphria in December, all eyes in the sector were on the company’s fourth-quarter earnings unveiled after the close on Wednesday. And the company did not disappoint. In fact, it offered a stellar performance, beating analyst estimates, while showcasing its international reach.”
The company said that the average cannabis net selling price per gram increased to $5.97(C$7.99) compared to $1.88 (C$2.52) in the fourth quarter of 2019 and decreased from $6.15 (C$8.15) in the third quarter of 2020. Tilray attributed the increase versus 2019 to a continued shift in distribution channels and product mix, including growth in International Medical sales, a shift in sales to higher potency and higher-priced products in the Adult-Use market, and the continued growth of Cannabis 2.0 products in Canada. The decrease from the third quarter of 2020 was due to the accelerated sales growth of cannabis flower products in the Canadian Adult-Use channel during the fourth quarter of 2020.
“Over the course of 2020, and despite COVID-19 related challenges, we transformed and strengthened Tilray, delivered solid full year results, significantly reduced net loss, and achieved our stated goal of delivering break even or positive Adjusted EBITDA in Q4 2020,” said Brendan Kennedy, Tilray’s Chief Executive Officer. “We did so by generating meaningful revenue growth across our core businesses, particularly international medical and Canadian adult-use in Q4, and reducing costs by $57 million on an annualized basis compared to Q4 of 2019. As a result, we now operate with a more focused, efficient and competitive cost structure. We also strengthened our balance sheet and positioned Tilray for growth and success in the future in combination with Aphria.”

Full Year 2020

The company reported that total revenue increased 26% to $210.5 (C$281.9) million during 2020 from $167.0 million in 2019. The increase was driven by $26.5 million or 25% growth in the Cannabis segment, and $17.0 million or 28% growth in the Hemp segment. The Hemp segment increase was partially due to the timing of the Manitoba Harvest acquisition in 2019 which resulted in 10 months of sales in 2019 compared to 12 months in 2020.

The net loss for the year decreased to $(271.1) million, or $(2.15) per share, compared to $(321.2) million or $(3.20) per share in 2019 largely due to the cost optimization measures undertaken during 2020. “In 2020, we recorded non-cash impairment charges of $61.1 million and $38.4 million of inventory valuation adjustments, as well as a non-cash charge of $100.3 million related to warrant valuations, partially offset by non-cash gains on debt conversion of $(61.1) million.”

O’Farrell went on to say, “As the cannabis sector overall continues to find its footing, one of the big questions the industry is wrestling with is: Is bigger better? Well, Tilray’s results are taking the guesswork out of that query. And investors were quick to notice. Tilray shares shot up more than 10% in after-hours trading. And although one quarter doesn’t make a trend, the winds are in the sector’s sails, as optimism linked to U.S. federal legalization continues to blow.”

Piper Sandler analyst Michael Lavery cut his Tilray rating (TLRY) to neutral from overweight citing the unlikelihood of further upside given the current valuation. The stock was lately trading at $31 far from its 52-week high of $67. Still, the analyst raised his price target from $15 to $26. Lavery said he believes that the merger with Aphria will improve profitability, deal synergies, and lead to an increase in higher-margin international sales. But he expressed concern that it could still be a year or two before marijuana is legally allowed on a federal level in the U.S. “and there is still little visibility on THC’s plan to enter U.S. THC markets.”


Debra BorchardtDebra BorchardtFebruary 16, 2021


GW Pharmaceuticals plc (Nasdaq: GWPH) announced that the total revenue for the fourth quarter ending December 31, 2020, was $148.2 million versus $109.1 million for the quarter ended December 31, 2019. This beat the analyst estimates according to Yahoo Finance by $3.66 million. The net loss for the quarter ended December 31, 2020, was $29.1 million versus a net loss of $24.9 million for the quarter ended December 31, 2019. The fourth quarter GAAP EPS for GW Pharmaceuticals was -$0.08 which missed analyst estimates by two cents.

The total revenue for the full-year 2020 was $527.2 million, a 69% increase compared to $311.3 million for the prior-year period. The company said in a statement that cash and cash equivalents on December 31, 2020, were $486.8 million.

“We are very proud of our strong financial performance and operational progress in 2020, as Epidiolex sales increased by more than 70% during the year despite the challenges of COVID-19. We are well-positioned to build on our success and continue to deliver strong growth in 2021 in both the U.S. and Europe, where we continue to make progress preparing for several commercial launches that are expected later this year,” said Justin Gover, chief executive officer of GW. “We have commenced our Phase 3 clinical program for nabiximols in the treatment of multiple sclerosis spasticity, which provides multiple opportunities for an NDA submission. Beyond nabiximols, we are advancing a diverse and robust neuroscience pipeline with several preclinical and clinical-stage pipeline candidates as part of our commitment to patients and to developing innovative medicines that address significant unmet needs. We have strong momentum and a tremendous opportunity to continue to build on our global cannabinoid leadership position as we prepare to join Jazz Pharmaceuticals and transform the lives of even more patients and families.”

The company noted that total net product sales of Epidiolex were $144.1 million for the fourth quarter and $510.5 million for the year ended December 31, 2020.

GW Pharmaceuticals also outlined the company’s pipeline as follows:

    • Schizophrenia (GWP42003)
      • Phase 2b trial now actively recruiting
    • Autism:
      • CBD formulation Phase 2 study expected to commence in Q1 2021
      • CBDV investigator-led 100 patient placebo-controlled trial in autism underway
    • New botanical cannabinoid pipeline product (GW541)
      • Phase 1 trial underway
      • Potential targets within field of neuropsychiatry
    • Neonatal Hypoxic-Ischemic Encephalopathy (NHIE) intravenous CBD program
      • Phase 1b safety study in patients continues to recruit
      • Orphan Drug and Fast Track Designations granted from FDA and EMA
    • Novel cannabinoid molecule synthesis and preclinical development
      • At least one program expected to enter Phase 1 in 2021
      • Several other molecules have demonstrated preclinical efficacy and are advancing towards the clinic

On Feb. 3, 2021, Jazz Pharmaceuticals plc (Nasdaq: JAZZ) and GW announced that the companies had entered into an agreement for Jazz to acquire GW for $220.00 per American Depositary Share (ADS), in the form of $200.00 in cash and $20.00 in Jazz ordinary shares (subject to limitations on the maximum and a minimum number of Jazz ordinary shares issuable per ADS), for a total consideration of $7.2 billion. The transaction is subject to the approval of GW shareholders, sanction by the High Court of Justice of England and Wales and other customary closing conditions, including regulatory approvals. Subject to the satisfaction or waiver of the closing conditions, the transaction is expected to close in the second quarter of 2021.

Debra BorchardtDebra BorchardtFebruary 10, 2021


Canopy Rivers Inc. (OTC: CNPOF) released its unaudited condensed interim consolidated financial statements and management’s discussion and analysis for the third quarter ending December 31, 2020Canopy Rivers reported an operating income of $3.0 million for the quarter. The company said this included royalty, interest, and lease income (before provisions for credit losses) of $5.9 million. The net income was $1.4 million.  Operating expenses were $3.4 million for the quarter, compared with $3.9 million for the same period last year.

Other comprehensive income was $80.8 million for the quarter, driven by the increase, net of tax, in the fair value of financial assets that are reported at fair value through other comprehensive income. Canopy Rivers reported a gross increase in the fair value of financial assets at FVTOCI of $94.5 million for the quarter, which was primarily attributable to the positive change in the fair value of its investment in TerrAscend. This was driven by a significant increase in TerrAscend’s share price during the quarter and a lower estimate of the liquidity discount used in the exchangeable share valuation due to positive cannabis regulatory reform momentum in the U.S., including support for cannabis legalization at all three levels of government and the success of five cannabis ballot initiatives at the state level. Partially offsetting this material increase was a decrease in the estimated fair value of the Company’s investment in Vert Mirabel common shares of $9.5 million, driven primarily by lower expectations about long-term wholesale cannabis pricing in Canada. This led to a total comprehensive income for the quarter of $82 million.

“Our quarter was highlighted by the announcement of our milestone transaction with Canopy Growth, which we believe will provide substantial value to our shareholders,” said Narbé Alexandrian, President, and CEO, Canopy Rivers. “Our portfolio companies continue to gain momentum, and we are further encouraged by the potential for regulatory reform in the U.S. given recent progress at the state level and the new administration’s position on cannabis reform. We believe that we will have the opportunity to enter the U.S. market at an ideal point in time and that our balance sheet, simplified share structure, strategic flexibility, and deep domain expertise will enable us to deliver value to shareholders as we consider potential material investments or acquisitions in the U.S.”

Canopy Growth

In December Canopy Rivers entered into an agreement with Canopy Growth Corporation  (NASDAQ: CGC) in which Canopy Rivers agreed to sell its interests in TerrAscend and TerrAscend Canada, Vert Mirabel, and Tweed Tree Lot to Canopy Growth for $115.0 million in cash, up to 3.75 million common shares in Canopy Growth, and the cancellation of Canopy Growth’s multiple voting shares and subordinated voting shares of Canopy Rivers. The CGC Transaction represents a return on invested capital of approximately 5.6x and an internal rate of return of approximately 101% as at the time of announcement. Following the anticipated close of the transaction, which is expected to be reflected in the March quarter, Canopy Rivers said it expects to have approximately $310 million in net cash and liquid securities on a pro forma basis.

“After a challenging September quarter during which we recognized material charges on our investment in PharmHouse, we ended the calendar year with significant positive momentum, as evidenced by our financial results,” said Eddie Lucarelli, CFO, Canopy Rivers. “We expect to sustain this momentum during the current quarter as we work towards closing our transformative transaction with Canopy Growth. By redeeming shares at a discount to net asset value and successfully monetizing assets that carried significant liquidity restrictions, the financial merits of the transaction are clear. Fundamentally, we believe that the accretive nature and strategic value of this transaction will unlock substantial value for our shareholders and optimally position the Company to execute on new opportunities in the U.S., the world’s largest cannabis market.”

Canopy Rivers said it expects to use the proceeds from the Canopy Growth deal to invest in more cannabis companies within the U.S. As part of that strategy, the company said it is also starting the process to delist its shares from the TSX so that it can list its securities on an alternate stock exchange that does not prohibit listed Canadian companies to invest in or acquire legal U.S.-based cannabis businesses.

Pharm House

The company also gave an update on the restructuring of Pharm House. Assets were identified for sale and parties that were interested in buying have put forth offers. Day to day operations have continued under DIP financing. Canopy Rivers said no repayments of the principal have occurred and the current outstanding balance remains $90.0 million, with interest payable by PharmHouse monthly.

On February 10, 2021, the company said it received a statement of claim filed by the PharmHouse majority shareholder concerning certain disputes relating to PharmHouse. Canopy Rivers said in a statement, “The claim is substantially similar to a claim previously filed in September 2020, which was subsequently discontinued. The Claim makes a number of allegations against Canopy Rivers, Canopy Growth, TerrAscend, and TerrAscend Canada. As with the previously filed statement of claim, Canopy Rivers views the Claim as it relates to its actions to be completely without merit and intends to vigorously defend its position at the appropriate time and in the appropriate forum.”


Debra BorchardtDebra BorchardtFebruary 9, 2021


Canopy Growth Corporation (NASDAQ: CGC) announced its financial results for the third quarter fiscal 2021 ending December 31, 2020, with net revenue of $153 million in Q3 2021, an increase of 23% versus Q3 2020. Canopy Growth said that $99 million of that revenue was driven by an increase in Canadian recreational and International medical cannabis revenue. Despite the increase in revenue, the company also recorded an eye-popping net loss of $829 million.

Canopy said that this was a $720 million wider loss than the previous quarter and blamed the loss on impairment and restructuring charges and other related charges of $416 million. $382 million of those related charges were as a result of the announcement on December 9, 2020. Canopy shocked investors at the time when it announced it would cease operations at several sites, plus its outdoor cannabis grow operations in Saskatchewan. The company said those decisions were the partial outcome of an ongoing end-to-end review designed to improve its margins. At the time, Canopy said it expected to record estimated total pre-tax charges of approximately $350 -400 million in the third and fourth quarters of Fiscal 2021.

“We delivered another quarter of record net revenue, with growth across all our businesses, led by improved commercial and supply chain execution,” said David Klein , CEO. “We are building a track record of winning in our core markets, while also accelerating our U.S. growth strategy with the momentum building behind the promising cannabis reform in the U.S.”

“We are executing against our cost savings program, with several initiatives already completed and more underway to build a leaner and more agile business,” added Mike Lee , CFO. “These cost savings, along with our top-line growth and continued cost discipline, puts Canopy firmly on a path to achieve profitability during Fiscal 2022, with further improvement anticipated beyond.” The company divested its shares in Canopy Rivers and increased its ownership in TerrAscend.

Of the total impairment and restructuring charges recorded during the third quarter, approximately 15% was a cash charge. Canopy said other expenses totaled $291 million during the quarter stemming from non-cash fair value changes, mostly driven by the company’s higher stock price.

While the losses are staggering,  Canopy is resting comfortably on cash and short-term investments that amounted to $1.59 billion on December 31, 2020. Still, this represented a decrease of $0.39 billion from $1.98 billion on March 31, 2020, reflecting the EBITDA loss and capital investments. The adjusted EBITDA loss was $68 million in the 2021 third quarter versus a loss of $97 million in the 2020 third quarter driven by net revenue growth and a decline in operating expenses.

Lowered Expenses

Canopy reported that total SG&A expenses declined by 15% versus the 2020 third quarter, driven by year-over-year reductions in Sales & Marketing, General & Administrative and Research and Development expenses. Sales & Marketing expenses declined by 15% reflecting lower advertising and marketing expenses versus last year’s spending attributable to product marketing and brand awareness campaigns in support of its Cannabis 2.0 products, partially offset by higher sponsorship fees for BioSteel and increased brand spending in support of the U.S. CBD business. G&A expenses declined by 23% and were due primarily to a reduction in costs attributable to corporate restructuring actions taken earlier in the year. R&D expenses decreased by 33% also driven by lower compensation expenses resulting from corporate restructuring actions taken earlier in the year.  Share-based compensation expenses decreased 68% over last year’s third quarter.

Positive Events

While the pain of making these huge changes has sucked the oxygen out of the room, the company has actually managed to make progress on other fronts. The Canadian recreational market share increased to 15.7% during the third quarter. “Our market share grew by 60 bps in Alberta and 120 bps in British Columbia, while it declined by 80 bps in Ontario in Q3 2021 vs Q2 2021. Our market share in Ontario improved by 150 bps during the latest 4-weeks ended January 17, 2021, vs Q3 2021,” said the company in its statement. Canopy said that its market share in the flower category grew by 180 bps sequentially and that it continued to drive market share gains in the growing value flower segment.

Beverages captured 34% market share in the quarter, even as new beverage brands have entered the marketplace. Canopy beverages retained the top 3 brands and our beverage brands are commanding higher velocity versus competitive set on a per SKU basis.

Martha Stewart’s health and wellness CBD products are seeing strong consumer demand, with the brand already outselling over 94% of all CBD brands in the U.S. in just 4 months since launch. Canopy has secured distribution of Martha Stewart CBD collection in 580+ Vitamin Shoppe and Super Supplements retail locations nationwide. Subsequent to quarter-end, Canopy launched CBD pet products under the Martha Stewart CBD and SurityPro CBD brands.


The company said that as a result of its organizational changes and cost savings plan it is now projecting a net revenue CAGR of 40%-50% from FY 2022 to FY 2024. The company said it expects positive adjusted EBITDA during the second half of FY 2022 and 20% Adjusted EBITDA margin for the full year FY 2024 and positive operating cash flow for the full year FY 2023 and positive free cash flow for the full year FY 2024.



Debra BorchardtDebra BorchardtFebruary 3, 2021


The Scotts Miracle-Gro Company (NYSE: SMG) reported that company-wide sales increased 105% to a record $748.6 million in its fiscal first-quarter primarily driven by strong retailer support in the U.S. Consumer segment as well as continued momentum in Hawthorne, the company’s hydroponic subsidiary.

For the quarter ending January 2, 2021, Scotts reported that income from continuing operations was $0.43 per diluted share, compared with a loss of $1.28 per share in fiscal 2020. Non-GAAP adjusted earnings – which is the basis of the Company’s guidance – was $0.39 per diluted share in the quarter compared with a loss of $1.12 per share last year. Due to the seasonal nature of the lawn and garden category, ScottsMiracle-Gro has historically reported a loss during its first quarter. The results in 2021 mark the first time Scotts has ever reported a first-quarter profit.

“While we anticipated a strong start to fiscal 2021, both the U.S. Consumer and Hawthorne segments surpassed our expectations and put us on a good trajectory for the balance of the year,” said Jim Hagedorn, chairman, and chief executive officer. “And Hawthorne continues to demonstrate its best-in-class performance within its industry, working with retailers and growers to help drive their success. Our strong start gives us renewed confidence in our full-year outlook although we remain sensitive to the challenges in the second half of the fiscal year against historic comparisons. We now believe we have enough visibility, however, to raise our full-year sales growth outlook for Hawthorne to a range of 20 to 30%, compared with our previous outlook of 15 to 20%. Despite the historically strong start in U.S. Consumer, it remains too early in the season to adjust our outlook for that business.”


Sales rose 105% to $748.6 million from $365.8 million, helped in part by the company’s fiscal calendar, where the first quarter of 2021 had five more days than the first quarter of fiscal 2020. The difference had a sales impact of approximately $43 million. The real shining star though is the indoor growing company Hawthorne whose sales increased 71% to $309.4 million driven by strong demand in all categories of indoor growing equipment and supplies. U.S. Consumer segment sales increased 147 percent to $408.2 million. Consumer purchases of the Company’s products at its largest retail partners increased 40 percent in the quarter. A significant portion of the sales increase for U.S. Consumer is attributable to the replenishing of retail inventory.

Selling, general and administrative expenses (SG&A) increased 31% to $156.7 million. The company attributed the increase to higher marketing expenses in the U.S. Consumer segment. “Our investment in marketing continues to be a focus area as we strengthen our relationship with gardeners,” Hagedorn said. “Our year-round commitment to driving the conversation with consumers will include our first commercial specially produced for the Super Bowl, which is scheduled to appear in the second quarter of this Sunday’s game.


Scotts said it now expects fiscal 2021 sales growth of 1 to 6% compared to 0 to 5% previously. Hawthorne sales guidance was increased to a range of 20 to 30% from a previous range of 15 to 20%. Guidance for U.S. Consumer sales of 0 to minus 5% was reaffirmed. Guidance for non-GAAP adjusted EPS of $8.00 to $8.40 was reaffirmed as the company noted that it now expects SG&A to decline 3 to 8% from 2020 spending levels, compared to a previous estimate of a 6 to 11% year-over-year decline. The adjusted gross margin rate is now expected to decline 125 to 175 basis points year-over-year due to higher commodity costs and segment mix more heavily skewed to the lower margin Hawthorne business than previously contemplated. The revised gross margin rate guidance compares to a previously expected decline of 50 basis points.


Debra BorchardtDebra BorchardtJanuary 14, 2021


Aphria Inc. (TSX: APHA) (Nasdaq: APHA) reported its financial results for the second quarter and six months ended November 30, 2020, with all amounts are expressed in Canadian dollars. The stock was moving higher by over 7% in early trading as the earnings per share beat expectations.

Net revenue for Aphria increased 33% to $160.5 million from $120.6 million in the same period last year. Second-quarter net revenue increased 10% sequentially from $145.7 million. The company attributed this to an increase in distribution revenue at CC Pharma in Germany and an increase in net cannabis revenue as well as five days of contribution from net beverage alcohol revenue from the acquisition of SweetWater.  The increase in distribution revenue is a result of a return to normalized levels from the prior quarter.

Still, the company delivered a net loss for the second quarter of the fiscal year 2021 of $120.6 million, or a loss of $0.42 per share versus a net loss of $7.9 million, or a loss of $0.03 per share for the same period last year, Sequentially, the fiscal first-quarter net loss was $5.1 million or a loss of $0.02 per share. On an adjusted basis excluding the impacts of the items noted in the reconciliation table below, the company recorded net income for the second quarter of the fiscal year 2021 of $3.2 million, or earnings of $0.01 per share.

The Q2 Non-GAAP EPS of C$0.01 beat expectations by C$0.04, however the GAAP EPS of -C$0.42 missed by C$0.39. The revenue of C$160.53M  also topped expectations by C$6.78M.

Irwin D. Simon, Chairman, and Chief Executive Officer said in a company statement, “We remain excited about our recently announced definitive agreement with Tilray to combine to create the largest global cannabis company and are on track to close the transaction in the second quarter of the calendar year 2021.  Looking forward, we are planning to execute on the significant strategic and financial opportunities provided by the addition of SweetWater and, upon the closing of the Tilray business combination, including our over $100 million anticipated pre-tax synergies, to generate significant value for our stakeholders.” The company expects the merger to be completed in the second quarter of 2021.

Average Selling Price Drops

Aphria reported that the average retail selling price of medical cannabis, before excise tax dropped to $6.96 per gram in the quarter versus $7.38 in the prior quarter. The company said that the decline was the result of specific pricing programs offered to assist patients in need who have been negatively impacted by the COVID-19 pandemic, along with other promotional programs. The average selling price of adult-use cannabis, before excise tax, increased to $4.29 per gram in the quarter, compared to $4.15 per gram in the prior quarter, primarily related to sales mix.

Increased Expenses

The operating expenses in the quarter jumped to $82.7 million from $54.5 million in the previous quarter and increased from $49.2 million in the prior year. The company blamed the increase on the transaction costs of $22.6 million associated with the acquisition of SweetWater during the quarter and increased share-based compensation largely driven by the increase in the company’s share price.

Cash Burn

Aphria noted that it ended the quarter with $320.0 million of proforma cash. Yet, the real cash and cash equivalents were $187 million, which dropped considerably from last year’s $400 million for the same time period. The working capital was $399 million, a steep decline from last year’s $725 million for the same time period. The company closed a USD $120 million financing with BMO, providing a USD $20 million revolving facility and a USD $100 million term debt facility.

On a positive note, Aphria’s efforts to improve its free cash flow were successful in the quarter, as it moved closer to its target of generating positive free cash flow.  During the quarter, the Company improved its free cash flow by more than $70 million.

Debra BorchardtDebra BorchardtJanuary 12, 2021


KushCo (OTC: KSHB) stock was falling over 6% to lately sell at $1.11 after the company reported the numerous challenges affecting the company. After the market closed on Monday, KushCo announced financial results for its fiscal first-quarter ending November 30, 2020, with net revenue decreasing 23% from the prior-year period to $26.8 million. On a positive note, the net loss was trimmed to $4.5 million from $12.5 million in the prior-year period. The basic loss per share was $0.03 compared to $0.12 in the prior-year period.

Many of the company’s challenges stem from the decision to right-size the business, which resulted in tighter credit terms being extended to smaller and less creditworthy customers. In addition to that, the company faced problems at the ports, where increased shipments to the U.S. combined with fewer port workers due to COVID issues causing delays.

Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Executive Officer said on the company’s earnings call, “We were expecting more significant growth in Q1, but like many other importers of goods, we were hit with unexpected and uncontrollable shipping delays due to record-breaking shipments to U.S. ports around the holiday season, which were exacerbated by COVID-19 restrictions.”

He went on to add, “This is a problem that has affected many importers, but fortunately, we have been working diligently with our network of freight partners and suppliers to expedite shipments and provide solutions to reduce the impact to our customers, which we expect will persist for another couple of weeks or more as the ports start to clear through the backlog that has been building up.

The net result of all of this is that some of the revenue that we were expecting to realize in Q1 has now been pushed into Q2 because we could not get the products off of the boat and into our warehouses on time before the quarter ended. The good news is that the business was not lost and it actually contributed to our strongest December in company history, December being the first month of Q2 and we saw $14.7 million in revenue during that month. And we still have a nice pipeline of business that we plan to execute on throughout the remainder of this Q2.” KushCo generated 21% gross margins for the quarter, which was lower than the 26% generated in the fourth quarter and was blamed on the shipping delays.

Looking Ahead

KushCo increased its net revenue guidance for its fiscal 2021 to be between $130.0 million and $160.0 million (previously between $120.0 million and $150.0 million). In addition, the company reiterated its expectation for adjusted EBITDA for the fiscal year to be between $5.0 million and $7.0 million. The company gave three reasons for the increased estimate. Kovacevich said, “We are continuing to see outsized growth with our MSO and LP customers as evidenced by our strong December and how we see the rest of the year panning out with some of the large custom projects we have in the pipeline. Number two, we have invested significantly in our sales team, bringing on folks from traditional CPG and other relevant backgrounds to nurture deep relationships with our top customers and to further penetrate our newer prospects. And number three, we are starting to secure a more long-term supply contracts, giving us better visibility into future business and acting like a right of first refusal for all of our products and services.”

The company also noted that it currently has $19 million due at the end of April 2021. CFO Stephen Christoffersen said on the earnings call, “We’ve been evaluating some term sheets and believe we can execute on an appropriate solution before the note is due, especially given the fact that we are now a profitable business that is more aligned with MSOs and LPs than ever before.”

KushCo also noted that if New Jersey and Arizona roll out programs, then revenue could be even higher this year. The company also said that uplisting to the NASDAQ is a priority, but that the process is somewhat out of their control.


Debra BorchardtDebra BorchardtJanuary 12, 2021


Organigram Holdings Inc. (NASDAQ: OGI)  released its results for the first quarter ended November 30, 2020, causing the stock to tumble in early trading. A shift to value products has hurt the company, which also warned that the second-quarter revenue could be impacted as well. The stock was falling over 7% to lately sell at $1.64.

The company delivered net revenue of $19.3 million for the first fiscal quarter of 2021 versus last year’s $25.2 million, which the company blamed on significantly lower wholesale revenue from licensed producers and a lower average selling price in the quarter.

Organigram said in a statement that the higher wholesale revenues during the first quarter of 2021 were opportunistic in nature, primarily sales to a single licensed producer; and not necessarily expected to recur each quarter at those levels, or if at all. First-quarter net revenue from the Canadian adult-use recreational market grew 30% to $16.8 million from $12.9 million in the prior-year quarter largely because Rec 2.0 products were not yet legalized.

The company also delivered a first-quarter net loss of $34.3 million, or ($0.17) per share on a diluted basis, compared to the 2020 first quarter net loss of $0.9 million, or ($0.01) per share, largely due to greater negative gross margin.

“We are pleased with our double-digit sales growth in the Canadian adult-use recreational market this past quarter as it reflects the success of many of our new product launches, particularly in the dried flower value segment,” said Greg Engel, CEO. “Now we look forward to our new higher-margin Edison dried flower offerings contributing substantially to overall revenue with even more new products to come in the next few quarters. We believe our product portfolio revitalization combined with additional resources to ramp up production and achieve greater economies of scale as well as our relentless focus on increased automation and cost efficiency opportunities position us well to generate further top-line growth and significantly improve gross margins.”

Gross revenue fell 11% to $25.3 million versus $28.4 million in Q1 2020 largely due to similar factors impacting net revenue and reflected the increase in excise taxes as a percentage of gross revenue in Q1 2021. In mid-calendar 2020, Organigram began a product portfolio revitalization to address what it believed to be some of the biggest consumer trends and preferences, including demand for value in large format, higher THC potency in dried flower as well as new genetic strains and novel products.

Less Than Stellar Outlook

Organigram said that stronger than expected demand for many of its new products resulted in competing priorities for the company’s existing staffing and production levels. “This contributed to delays in product launches and hindered consistent order fulfillment, which resulted in some meaningful missed revenue opportunities in Q1 Fiscal 2021 and is expected to continue to impact Q2 Fiscal 2021. As such, management has decided to ramp up staffing. By early Q3 Fiscal 2021, the Company plans to have hired 100 more positions, mostly in cultivation, and up to an additional 30 more positions in packaging.”

The company also warned that its revenues in the second fiscal quarter could also be impacted due to COVID closures. However, the stores are still offering online and delivery services.

Organigram also told investors that a negative non-cash adjustment to cost of sales for unabsorbed fixed overhead costs in Q2 Fiscal 2021 was anticipated to persist as a result of the company’s plans to cultivate less than its cultivation capacity. “Some production inefficiencies are anticipated to persist in the near to medium term and impact gross margins while Organigram continues to launch new products and optimizes production and staffing.”

Organigram launched a number of value segment products to respond to increased demand in this area and it said the new products have been well-received by the market, particularly SHRED (currently the Company’s deepest value offering). SHRED sales drove the Company’s revenue growth in Q1 Fiscal 2021 in the Canadian adult-use recreational market over Q4 Fiscal 2020. “As such, Organigram is focused on further revitalizing its Edison mainstream brand, which attracts higher product gross margins, by launching new dried flower offerings with unique strains and higher potency THC.”

Debra BorchardtDebra BorchardtDecember 14, 2020


HEXO Corp. (NYSE: HEXO) reported first-quarter fiscal 2021 financial results with gross revenue of $41.3 million, a sequential increase of 14% and 114% from the prior-year period first-quarter. Total net revenue increased $2.3 million to $29.4 million from the fourth quarter due mostly to an 8% growth in adult-use cannabis sales and a 54% growth in the adult-use beverage category. Total net revenue increased 103% from the fiscal first-quarter of 2020. All amounts are expressed in Canadian dollars.

Operating expenses for Hexo were trimmed to $20.8 million from $71 million in the fourth quarter as the company said it continued to streamline costs across the organization, primarily in SG&A, offset by marketing costs related to product launches. Loss from operations improved to $2.6 million in the first quarter versus a loss of $60.5 million in the fourth quarter, which the company said was driven by a clean balance sheet and absence of material, non-recurring charges.

HEXO CEO and co-founder Sebastien St-Louis said, “Today’s record revenue performance reflects our commitment to providing consumers with high-quality products, at reasonable prices, for all occasions. We continue to hold the number one market share position in Quebec while continuing to aggressively expand into other markets. HEXO is now top four in adult-use market share by net sales dollars in Canada. We have also moved into the top beverage spot through Truss, our joint venture with Molson Coors, and have reached the number one market share position for hash, which we believe will continue to be an important category for the industry.”

The company reported that its consolidated gross margin for the first quarter improved to 35% from 30% in the fourth quarter. Hexo attributed the increase to an improved gross profit in adult-use beverage during the period, where Truss Beverage achieved positive gross profit in only its second quarter of being in the market

“We made extraordinary gains toward profitability this quarter, as we continue to optimize production, persist in our war on COGS, and focus on reducing our SG&A. This was the sixth sequential quarter of Adjusted EBITDA improvement, as we march towards being Adjusted EBITDA positive. We believe the strength of our balance sheet, along with our low depreciable capital base, have put us on a path where we are looking beyond positive Adjusted EBITDA and striving towards positive EPS,” continued St-Louis. “As discussed on our fiscal year-end earnings call, we purposely took time this quarter to focus on better matching supply to forecasted demand, leading to tough decisions, such as delaying the relaunch of our UP brand until Q2. Despite this, we were able to achieve record sales and I am delighted at the progress we have made to date. UP has been successful thus far, which gives us confidence in our approach moving forward.”

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