earnings Archives - Green Market Report

William SumnerWilliam SumnerJuly 19, 2019
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3min1470

Expenses are up, and revenue is down as Namaste Technologies Inc. (TSXV: N) (OTCMKTS: NXTTF) tries to put the troubles of the past few months behind it. Yesterday the company released its financial statements for the three and six month periods ending on May 31, 2019.

Revenue for the quarter was $3.99 million, compared to $4.06 million during the same period in the previous year. For the six month period, revenue was $8.5 million, down from $9.6 million. The net loss for the quarter was $8.6 million. For the six month period, the net loss was $18.91 million, representing a year-over-year increase of $7.47 million.

For the six month period, selling, general and administrative expenses rose from $14.71 million in the previous year to $21.57 million. A significant contributing factor to Namaste’s rising expenses and decreased revenue was a combination of toxic news and legal issues involving its former CEO, Sean Dollinger.

Last October, the company came under a short-seller attack by Citron Research, which among other accusations, claimed that Dollinger, who was then CEO of Namaste, lied to shareholders. Dollinger claimed to have sold Dollinger Enterprises US, a subsidiary of Namaste, to an arm’s length party, when in fact he had sold it to company insiders.

Consequently, Namaste hired a special investigator to examine Citron’s claims, which ultimately led to Dollinger’s ousting and a $1.9 million bill for the investigation. Further compounding the scandal was news that its auditor PricewaterhouseCoopers, LLP resigned as well as claims of “irregular advertising” by the Brazilian government. As a result of losing its auditor, the company was also late in filing its financial statements; placing the proverbial cherry on top of this scandal-ridden sundae.

Nevertheless, Namaste has endured and ended the second quarter with positive working capital of $63.3 million and was able to acquire a 49% stake in Calgary, AB-based Choklat Inc. and as well as increase its equity position in Pineapple Express Delivery Inc. to 49%.

In a statement, Namaste’s interim CEO Meni Morim expressed confidence in the company’s short-term outlook.

“We have improved the Company’s foundations to build the world’s most customer-focused cannabis marketplace,” said Morim. “From here, we are reprioritizing and refining our investments towards scalability, gaining market share and working capital management. We expect to see these results take shape over the next three to six months with a balanced approach between working capital optimization and the right investments to help the company grow.”


Debra BorchardtDebra BorchardtJuly 15, 2019
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6min2440

The parent company of Organigram Inc., Organigram Holdings Inc. (NASDAQ: OGI) (TSX VENTURE: OGI) reported its revenue of $24.8 million for the third quarter ending May 31, 2019, fell sequentially from the second quarter net revenue of $26.9 million. However, it was a 621% increase over last year’s net revenue of $3.4 million.

The company said that the third-quarter net revenue reflected significant sales growth from Alberta and Atlantic Canada offset by the timing of shipments to Quebec that occurred subsequent to quarter-end, a large pipeline fill in Q2 2019 for Ontario in advance of opening retail stores that were not fully matched by reorders in Q3 and fewer reorders from British Columbia in Q3 (as demand for legal products remains generally under indexed in that province). The gross revenue of $30.3 million was a 784% increase over last year’s gross revenue of $3.4 million.

The company also delivered a net loss of $10.2 million or $(0.07) per share. The company said the net loss was largely due to non-cash fair value changes to biological assets in inventory. This was a 429% increase over the net income of $4 million for the same time period last year. Year to date, net income from continuing operations was $12.9 million or $0.09 per share on a diluted basis

“We continued to report strong sales in our third quarter and now have distribution in all ten provinces. In our fiscal year to date, we have generated strong operating and financial results, placing us among the leaders in the Canadian industry. While we saw a temporary reduction in yield per plant in Q3 due to temporary changes in growing protocols, not only have our yields returned to historical levels, but we have seen a meaningful increase in average cannabinoid levels in harvests to date in Q4” said Greg Engel, Chief Executive Officer of Organigram.

Cost To Grow Got More Expensive

The third quarter cash and “all-in” costs of cultivation of $0.95 and $1.29 per gram of dried flower harvested4, respectively, increased from $0.65 and $0.95 per gram in Q2 2019 almost exclusively due to a temporary decrease in yield per plant as a result of a change in growing protocol. The company said it returned to proven growing methods and yield has returned to previous levels toward the end of Q3 and in Q4 (to date).

The change in growing methods also affected the gross margins which decreased to $12.3 million or 50% from the second quarter’s 2019 adjusted gross margin of $16.0 million or 60%5 largely due to production costs, the temporary decrease in yield per plant and write-downs of legacy packaging materials that were replaced with new, more consumer-friendly packaging. Q3 gross margin was negative $0.2 million largely due to fair value changes in biological assets and inventory sold.

Getting Ready For Edibles & Vapes

The company said its production and product development teams have made significant preparations to execute its strategy and plans for the derivatives and edibles launch later in 2019. Organigram has chosen to initially focus on the two most popular product forms based on US state sales data: vaporizer pens and edible products.

Organigram said it expects the construction of additional in-house extraction capacity to be completed by the end of calendar 2019. However, it said it has the capacity to fill vaporizer pens in its existing facility ahead of the licensing of Phase 5 in order to be ready to sell the products as soon as authorized for sale in December 2019. During the quarter, Organigram announced a $15 million investment commitment in a high speed, high capacity, fully automated production line with the ability to produce up to 4 million kilograms of chocolate edibles. The investment will provide the company with a state-of-the-art chocolate molding line and a fully integrated packaging line that includes advanced engineering, robotics, high-speed labeling, and automated carton packing. Organigram expects to take delivery of the equipment in the fall of 2019 and complete installation and commissioning in time for initial sales shipments in early calendar 2020

“We have seen adult recreational cannabis sales highly correlate to the presence of physical retail stores based on a comparison of the provinces in Canada. The Canadian market is positioned to grow significantly with more retail stores opening – particularly in the two most populous provinces of Ontario and Quebec – and the upcoming legalization and availability of edibles and derivative products..”


Debra BorchardtDebra BorchardtJuly 10, 2019
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5min2420

KushCo Holdings, Inc. (OTCQX: KSHB) announced its financial results for the third quarter ending on May 31, 2019, after the market closed on Tuesday. Net revenue was $41.5 million, representing a quarter-over-quarter increase of 17.9%.On a GAAP basis, gross profit was 17.8%. On a GAAP basis, the net loss was $10.6 million, up from $9.2 million in the same period of the previous year. Cash on hand is approximately $12.2 million.  During its earnings conference call, the company noted that big customers would be the focus.

“We’re getting more customers into these buckets spending over $10,000 or more with us in the last 12 months, and in the large buckets, the $500,000 to $1 million we saw an increase of seven customers from fiscal ’18 when we look at the last four quarters,” said KushCo Chairman and CEO Nick Kovacevich on the company’s earnings conference call. “And in the $1 million-plus bucket we see an increase from four customers in fiscal ’18, to now 13 customers when we look at the last four quarters. And so what this is telling us is that there’s bigger customers now that we’re going after, the MSOs and Canadian LPs, and that these customers are spending more money with Kush, and they’re able to get more products because our offering has expanded, and if you look at the average number of SKUs that these customers are purchasing, we see these metrics going in the right direction as well. And now customers that are spending $500,000 to $1 million with us in the last 12 months are buying on average 56 SKUs, and customers in that $1 million-plus bucket are buying a tremendous 73 SKUs from us on average.”

Kovacevich also announced on the call a partnership with C.A. Fortune, which is one of the leading consumer product sales and marketing agencies that work with large retailers, specifically in the grocery category. “We obviously have a great network of brands and with the passage of the Farm Bill it presents a huge opportunity for us to take our CBD brands that we work with and give them the opportunity to get placement into these large retail outlets. We see this as a very high-margin and high-value initiative, because not only are we solving a problem for our customer by allowing them to build their brand nationally, but we’re also solving the problem for these national retail chains who want to get into the CBD and hemp space very badly, but don’t necessarily know who the brands are that they should be carrying,” he said.

KushCo Holdings, Canaccord Genuity cannabis analyst Bobby Burleson said, “KSHB appears positioned to deliver revenues toward the upper end of the guided range for F19 (guidance for $140M to $150M), based on strength in mature and emerging states. We believe continuing improvement for gross margin and a looming Nasdaq up-list will act as positive catalysts for the shares over coming months. Notably, the company is leveraging its growing scale to secure better pricing from suppliers and terms with customers. Cross-selling efforts continue to bear fruit, and while vape hardware looks to remain a sizable portion of overall revenues, the mix is improving outside of the vape category as custom products and energy solutions gain ground.”

He added, “In our view, hemp CBD could drive longer-term upside following a recent partnership with CA Fortune that opens mainstream retail channels. Although too early to quantify, management is considering breaking out CBD revenue in the future. We are increasing our estimates and reiterate a Spec Buy rating. Price target remains $7.50.”

KushCo reiterated its fiscal 2019 revenue guidance, targeting in on the high side of its range of $145 million to $150 million for the fiscal year ending at the end of August. KushCo also said that it plans to offer financing in the future to its customers who may need help buying expensive extracting equipment.


Debra BorchardtDebra BorchardtJuly 2, 2019
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6min2250

Vertically integrated consumer cannabis company 1933 Industries Inc.  (CSE: TGIF) (OTCQX: TGIFF) delivered its third quarter results for the three months ended April 30, 2019, in Canadian dollars. Revenues of $4.6 million increased 40% over last year’s $3.7 million for the same time period.  The rise was a 28% increase sequentially.

The net loss rose to $7.2 million versus last year’s net loss of $2.9 million. The company attributed the increase in losses to the investment in the company’s consulting arm, Spire Global Strategy. 1933 said that it acquired Spire on the basis of an independent valuation, a strong team, and a solid business plan to provide services to the burgeoning cannabis sector in Canada. The company added that the expected revenue and future market development of Spire were not realized. 1933 said that its strategy has since shifted to consolidate its focus on the nation-wide growth of its consumer branded goods and supporting cultivation and extraction assets, where the value proposition of these sectors to the business provides a better return on investment.

CEO Chris Rebentisch said, “Overall, we are pleased to report strong growth comparatively to our last quarter, driven by rising consumer demand for our AMA cannabis products in Nevada and the impressive growth of our Canna Hemp line throughout the United States, which is one of the largest growing cannabis markets globally. Since becoming a publicly-listed issuer two years ago, we have focused on building one of the most valuable and respected CBD brands in the market and in successfully growing THC market share in Nevada, where we continue to be one of the largest suppliers of wholesale branded products in the State, with a major presence in every dispensary. We have spent significantly on the expansion of our infrastructure to support the future growth of our brands and have increased spending in product development, inventory build-out and sales and marketing efforts”.

Capital Raise

1933 closed a non-brokered private placement of 10,000,000 units at $0.45 per unit for total proceeds of $4.5 million, which was fully subscribed by one investor.  After the end of Q3, the company reported it closed a sale-leaseback transaction for the land and cultivation facility under construction in Las Vegas, Nevada. The company sold the assets for C$14,027,035 or $10,450,000 less various adjustments for title fees, commission, and transfer taxes, which resulted in a net sale price to the company of C$13,328,701 or $9,862,700.

Product Portfolio

1933 has a portfolio of over 250 SKUs of THC and CBD-infused products. It has signed three significant licensing agreements over the period with household brand names such as OG DNA Genetics, Birdhouse Skateboards, and Gotti’s Gold.

AMA signed a licensing agreement with OG DNA Genetics, a globally recognized leading cannabis brand, for the exclusive license to cultivate, manufacture, sell and distribute co-branded cannabis products for a two-year term in the State of Nevada.

Infused announced a partnership with Birdhouse Skateboards™ for the exclusive launch of co-branded hemp and CBD products geared towards the growing action sports market. The collaboration between one of the most respected skateboarding names in the world and Infused aims to develop several co-branded products, including CBD recovery creams and lotions, as well as hemp-only recovery creams and lotions which will be sold under Canna Hemp, Canna Hemp X and Birdhouse Skateboards names.

AMA strengthened its partnership with hip hop artist Kurupt for the launch of Gotti’s Gold in Nevada, an exclusive premium collection of fine cannabis products intended to appeal to adult-users of all demographics, in order to meet the rising demand for cannabis products in the state.

AMA and Infused continued developing and creating unique brands with the launch of Canna Fused, a line infused with CBD and THC in a variety of ratios, featuring vape pens, cartridges, lotions, and lip balms. Infused subsequently launched Endurance and Recovery Elixirs, under the Canna Hemp X™ line of sports action products and engaged professional athlete and mixed martial arts fighter Sarah Moras as a Brand Ambassador and sponsored-athlete.


Debra BorchardtDebra BorchardtJune 21, 2019
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6min4870

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) announced its financial results in Canadian dollars for the fourth quarter and fiscal year ended March 31, 2019, with annual net revenue growth rising 191% to $226.3 million. Net revenue rose 313% to $94.1 million.

The net loss for the quarter as $323.4 million and earnings per share for the fourth quarter was -$0.98 which missed analysts estimates by $0.66 causing the stock to fall over 6% in early market trading. This compares to a net loss of $54.4 million or $0.31 per share for the same time period last year.

In addition to the earnings miss, the company noted that its adjusted EBITDA came in at a loss of $257.0 million in fiscal 2019 versus a loss of $36.1 million for 2018. The company attributed the year-over-year loss to the investments made in fiscal 2019 sales and marketing and general and administrative costs.

The average selling price per gram fell 11% from $8.43 last year to $7.49 in this year’s fourth quarter. Although the company did report that medical prices rose 2% and international prices rose 4% for the same time period.

In addition to the losses, sales declined as well on a sequential basis. Gross adult use cannabis sales in the quarter fell 4% to 68.9 million from the third quarter. Medical marijuana dropped 41% from the third quarter to the fourth quarter’s $11.6 million Canopy said this was due to a product transition for Tweed, DNA Genetics, LBS and certain CraftGrow partners to the recreational channel. The company says it has been remedied.

International medical sales generated revenue of $10.1 million in fiscal 2019, but this category’s gross revenue of $1.6 million in the fourth quarter fell 25% year-over-year. Canopy said that “European sales were negatively impacted by supply challenges in Canada, with the company prioritizing its Canadian customers.”

On a positive note, sales of Storz & Bickel vaporizer devices, along with revenue from other strategic sources including extraction services, and clinic partners, resulted in $34 million in other revenue generated in fiscal 2019 giving the sale line a nice extra boost.

“The fourth quarter wraps up a historic year with major steps taken in Canada to build-out our national platform while scaling all of our processes to bring cannabis to market. The third quarter of the year benefitted from months of advanced production while the fourth quarter relied more on efficient throughput and a more automated platform,” said Bruce Linton, Chairman, and Co-CEO of Canopy Growth. “With more product formats coming to the Canadian market later in the year, we are working hard to ensure that we are ready to hit the ground running with products, formats, and brands that Canadians trust.”

Even with these negatives, Canopy remains the cannabis company with the largest market share in Canada. It is also sitting on $4.5 billion as of March 31, 2019, in cash and cash equivalents.  Canopy doubled its harvest size from the fiscal third quarter of 2019 to the fiscal fourth quarter of 2019, and it expects to do so again as it moves from the fourth quarter to the first.

Spending Money To Make Money

The sales and marketing increased from $38.2 million  to $154.4 million as the company invested in brand-building, consumer marketing, and promotional campaigns for the Tweed, Tokyo Smoke, Spectrum Therapeutics, active partner brands, as well as the development of cannabis and CBD consumer products and brands expected to be launched towards the end of fiscal 2020.

The company said that general and administrative expenses in fiscal 2019 were $168.5 million, reflecting the ongoing investments in building commercial capacity, governance and public company compliance costs associated with TSX and NYSE listings, legal and professional services in expanding operations.

The statement said that acquisition-related expenses were $23.4 million in fiscal 2019, with Canopy Growth closing on several transactions in the year including the acquisition of HIKU Brands Company Ltd., ebbu, Inc., Storz & Bickel GmbH & Co. KG, and Canopy Health Innovations Inc. Acquisitions announced subsequent to fiscal 2019 – including This Works Products Limited, Canamo y Fibras Naturales, S.L., and the future acquisition of Acreage – incurred related expenses throughout fiscal 2019 as well.

Canopy and Acreage shareholders approved of the merger this week.


Debra BorchardtDebra BorchardtJune 13, 2019
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4min3640

HEXO Corp (TSX:HEXO) ( NYSE-A:HEXO)  reported its financial results for the third quarter of the 2019 fiscal year with $15.9 million in gross revenues and a net loss of $7.7 million. The company claims it is on track to reach $400 million in net revenue in 2020 and says it will double net revenue in the fourth fiscal quarter.

HEXO CEO and co-founder Sebastien St-Louis said, “This quarter saw HEXO remain on-track as it continues ramping up to $400 million in revenue in fiscal 2020, including completing the first harvest in our 1 million sq. ft. Expansion and preparing to fund our ongoing expansion projects and innovation initiatives by entering a $65 million syndicated credit facility.”

This ambitious plan is based on the company entering into a syndicated credit facility with CIBC and BMO for up to $65 million available credit to fund continuing expansion and innovation initiatives.

Unfortunately, the company’s average gross selling price for adult use fell from $5.83 a gram in the second fiscal quarter to $5.29. The company said, “This is reflective of increased dry flower sales in the sales product mix during the quarter which commands lower market sales prices per gram. The adult-use net revenue per gram equivalent decreased to $4.30 from $4.81 in the previous quarter reflecting the consistent approximate ($1.00) impact to revenue per gram due to excise taxes. In future periods as the sales mix shifts towards oil and other value-added products from lower valued dry flower products the impact of these excise taxes on revenue per gram is expected to decrease.” Medical prices fell from $9.15 to $911 for the same time period.

Adult use cannabis gross revenue also fell from $14.7 million in the second fiscal quarter to $14.6 million. The company said the drop was due to, “A result of the Company’s additional production capacity still in the ramp-up stage as the new 1 million sq. ft. greenhouse realized its first harvest in April 2019.

Medical cannabis gross revenue also fell sequentially from $1.387 in the fiscal second quarter to $1.323. Total net sales fell from $13.4 million to $13.9. The company said, “Net medical revenues decreased during the quarter by 7% to $1,090 as compared to the second quarter of fiscal 2019 due to the overall decrease in medical sales during the period.”

HEXO most recently announced the closing of the agreement to acquire Newstrike. The acquisition will provide HEXO Corp capacity to produce approximately 150,000 kg of high-quality cannabis annually with access to four additional production campuses. It also provides the company diversified domestic market penetration with combined distribution agreements in eight provinces.

Subsequent to quarter end, HEXO bolstered its senior management team through the appointment of Michael Monahan as Chief Financial Officer and Donald Courtney as Chief Operating Officer.

 


Debra BorchardtDebra BorchardtMay 30, 2019
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3min2030

MJardin Group, Inc.  (CSE: MJAR) (OTCQX: MJARF) reported its financial results for the quarter ending March 31, 2019, in Canadian dollars. The company delivered revenues of $10.9 million versus last year’s $6.7 million for the same time period.

MJardin said it continued to see improvements in the sales of Cannabis from its WILL facility, recording $1.1 million in sales in the first quarter with a $0.8 million fair value adjustment to inventory. The Colorado operations generated $8.9 million in sales.

The net loss was $7.7 million versus last year’s $1.3 million. Total expenses increased to $3.4 million from $1.8 million. General and administrative expense increases were attributed to the GrowForce Holdings acquisition. The company underwent corporate cost-cutting measures late in the first quarter of 2019 and the company said the resulting expected annual SG&A and Payroll expense run rate is approximately $12.1 million.

“Our Q1 results reflect the successful implementation of our operating plans.  We refocused our priorities back to what we do best: grow high yield premium products,” said Adrian Montgomery, Chairman, and Interim CEO. “We made considerable progress towards the completion of our build outs and expansion of our U.S. and Canadian facilities, committed to smart and strategic growth decisions, and utilized the impressive industry talent we have on our team to improve our earnings and bolster our capital position. In Q2 we will start recognizing the benefits of the SG&A cost-cutting initiatives we started at the end of Q1. We will continue to develop and build demand for our premium product lines and evaluate more tuck-in opportunities where we can confidently and responsibly deploy smart capital.”

Post Quarter End

Following the end of the quarter, MJardin acquired Nevada edible producer Carson City Agency Solutions dba Cannabella. This past week, the company completed construction of its 76% owned “GRO” cultivation facility in Dunnville, Ontario. Plus, the company said it submitted the Evidence of Readiness package to Health Canada for the purposes of receiving a Cultivation and Processing Licence. On May 29, 2019, MJardin said it amended the terms of its existing loan with the senior lender to remove the callable feature and convert into a term loan, this enables MJardin to simplify the Company’s capital structure and fully focus on executing the operational plan.


Debra BorchardtDebra BorchardtMay 29, 2019
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5min4290

Acreage Holdings, Inc.  (ACRG-U.CN) (ACRGF) reported financial results for the quarter ending March 31st, 2019 with revenue rising 487% to $12.9 million, but the company also delivered a whopping net loss of $31.2 million.  Looking at pro forma results, the revenue would have been $33.1 million and the adjusted net loss would have been $15.5 million.

“I am pleased with the progress we made toward increasing our national footprint and particularly our expansion in the western United States.  Our revenues grew by 487% compared to the first quarter of 2018, despite delayed dispensary openings caused by local regulators in both Massachusetts and Ohio,” said Kevin Murphy, Founder, Chairman and Chief Executive Officer of Acreage.  “We do not expect these delays to impact our long-term ability to generate industry-leading returns.  Additionally, we expect our arrangement agreement with Canopy Growth will provide us the ability to rapidly accelerate our growth plan as the transaction makes us the most attractive partner in U.S. cannabis.”

On the company’s conference call, Murphy said he wanted the company to become the “Proctor & Gamble of cannabis.” He highlighted the Form Factor acquisition saying it was a prudent use of shareholder money. Suggesting that other companies were paying high prices for fewer returns on their acquisitions.

Canopy Growth Acquisition

The company announced that it was being acquired by Canopy Growth Corporation at a time in the future when the laws of the United States change such that Canopy Growth is permitted to acquire Acreage. It is projected to have a window of 7.5 years for this to occur.

“The immediate benefit our investors get is cash up front,” said Murphy. “Then Acreage will take full advantage of Canopy’s amazing brand portfolio, IP, and technology for zero payments. We’ll also have an additional 63.2 million shares of stock to use for investments. Our phones are ringing from cannabis operators across the country stating their desire to be a part of the operation.”

Murphy also noted that the agreement is not capped at a specific dollar amount. “It’s already 50% higher than the original valuation,” said Murphy. “It would really be $5.3 billion on a fully diluted basis. More than a 100% increase from when we accessed public markets six months ago. Your shares worth $31.64 this would imply an upside of 67% to the closing from this past Friday.”

The company stated that announced shareholders in aggregate holding approximately 91% (exceeding the 66 2/3% required threshold) of all votes eligible to be cast at the special meeting of Acreage shareholders to be held on June 19, 2019 have indicated support “FOR” the Canopy Growth agreement.  This includes approximately 38% of votes eligible to be counted for purposes of the disinterested shareholder approval, which requires a majority of votes cast at the Special Meeting.

Looking Ahead

Following the end of the quarter, Acreage expanded its geographic footprint from 19 to 20 states with its acquisition of Deep Roots Medical in Nevada. The company said it has approximately $140M in liquid capital; $64M in cash and cash equivalents and $75M of highly liquid short-term investments on hand as of Q1’19.

Murphy also spoke of the Deep Roots acquisition. Noting it distributes products to 80% of Nevada’s dispensaries. “We have very high expectations of our Nevada business,” said Murphy on the earnings call.

The company has an agreement to acquire the Kanna dispensary in Oakland and expects to open as The Botanist this summer. The company also plans to launch three brands this summer: The Live Resin Project, The Botanist Herbalist Series, Natural Wonder.

 


StaffStaffMay 28, 2019
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4min3130

Charlotte’s Web Holdings, Inc. (CSE:CWEB) (OTCQX:CWBHF) reported financial results for the first quarter ended March 31, 2019 with revenue growing 66% to $21.7 million. The net income dropped to $2.3 million from last year’s $3.1 million. The company delivered earnings per share that fell to $0.03 and diluted EPS of $0.02 versus last year’s $0.04. 

Operating expenses doubled from last year’s $6.4 million to this year’s $13.2 million.

Just a couple of weeks ago the company named Deanie Elsner as the new Chief Executive Officer. Elsner is from Kellogg’s where she was President of the $3B dollar U.S. Snacks division – the largest business unit in the Kellogg Global portfolio and prior to that served more than 20 years in various leadership roles at the Kraft Foods Company including Chief Marketing Officer.

“Charlotte’s Web has established itself as the market leader in sales, and more importantly as a trusted brand with an impeccable reputation,” said Ms. Elsner. “As someone with an extensive career in the CPG industry-leading global brands, I see a tremendous opportunity to further influence, shape and grow the CBD category while turning Charlotte’s Web into a household product name that consumers can rely on around the world. My priority is to raise the Company’s level of operational effectiveness and accelerate growth opportunities acting with urgency and decisiveness.”

Looking Ahead

Following the end of the quarter, shipments began to a fourth national retailer and the company has over 6,000 retail locations now receiving shipments of its leading hemp CBD products. The company said that more than 2,300 new retail doors were added since the start of the year – more than all of 2018 – significantly expanding the company’s physical brick and mortar retail reach.

As of May 28, 2019, Charlotte’s Web reported that it is shipping product to four national retailer locations covering 18 states combined. The company said it expects additional states and stores to be added by these retailers throughout 2019. A major grocery retailer is also carrying all categories of Charlotte’s Web product portfolio including oils, capsules and topicals, while the remaining national retailers have begun their Charlotte’s Web product introduction with topical products only.

“We are forecasting revenue to grow at a faster pace than operating expenses, particularly in the back half of the year,” stated Rich Mohr, Chief Financial Officer of Charlotte’s Web. “This supports our adjusted EBITDA guidance in the 30%-35% range on an annualized basis, in line with our historical norms. Our sales volumes continue to increase on a quarterly basis and we’re expecting continued top-line growth during the second quarter and during the last half of the year. We reiterate our revenue guidance for 2019 of between $120 million and $170 million.”

 

 


Debra BorchardtDebra BorchardtMay 17, 2019
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3min2880

Origin House, formerly known as CannaRoyalty (CSE: OH) (OTCQX: ORHOF)  announced preliminary unaudited revenue of approximately C$11 million for the first quarter ending March 31, 2019. No profit or loss numbers were revealed.

The company also noted that April was off to a good start with approximately C$6.5 million in unaudited revenue. The wholly-owned distribution division, Continuum contributed approximately $4.8 million of that amount in April.

“As we outlined on our Q4 call less than a month ago, momentum is building in the California market for all legal players and for Origin House specifically. Q1 and the month of April were record revenue periods for the Company, and also record periods for the number of top California cannabis brands that our team successfully onboarded,” said Marc Lustig, Chairman and CEO of Origin House. “If 2018 was a year of building for Origin House, 2019 is rapidly progressing toward an inflection point where the platform we have built begins to demonstrate its true financial power, with brands signed early in the year, rolling-out through our network and a robust pipeline of brand opportunities ahead of us.”

The approximate gross margin for the first quarter was 15% and the company said it expects gross margin to continue to trend upwards from the first quarter to the second.

The company announced on May 3, that it had obtained an interim order from the Ontario Superior Court of Justice in which Cresco Labs Inc. will acquire all of the issued and outstanding shares of Origin House. Receipt of the interim order authorizes Origin House to hold its special meeting of shareholders on June 11, 2019.

Lustig added, “I very much look forward to working alongside the team at Cresco Labs Inc. to leverage our complementary footprints and management skillsets to build a dominant North American cannabis consumer brands company.”

Both Cresco Labs and Origin House will release their earnings on May 29.



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