earnings Archives - Page 3 of 42 - Green Market Report

Adam JacksonAugust 16, 2022
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InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) posted positive results despite barely missing revenue expectations, as the company looks to further its international reach and shore up it’s new-found partnerships.

The Israeli-based cannabis company — also known as Canndoc — reported its financial report card for the second quarter ending June 30, 2022.

InterCure reported approximately $37 million in revenue during the period, more than double versus the same period last year; and a gain of 9% sequentially — though missing the Yahoo Finance Average analyst estimate for revenues of $39 million.

The company also reported a second-quarter net income of $6 million, remaining flat sequentially; and a net income of $2 million in the same period last year. The earnings were a gain of $0.34 cents per share — above analyst expectation — versus a gain of $0.12 cents per share in the previous quarter, according to SEDAR filings.

“We are proud to deliver our tenth consecutive quarter of profitable growth, solidifying our operational excellency and leading position,” said CEO Alexander Rabinovitch. “We remain focused on developing and launching the highest quality pharmaceutical grade medical cannabis products as our target markets are evolving at a rapid pace. During the second quarter we have successfully ramped up our upstream and downstream operations and executed our global expansion to meet the solid demand for our high-quality branded products.”

InterCure said that it’s the tenth consecutive quarter of high growth representing an annualized run rate of $150 million. Adjusted EBITDA rose 90% year-over-year to $9 million, representing 23% of revenues and 4% sequential growth. Gross profit soared over 115% year-over-year and 16% sequentially to over $16 million.

InterCure also reported that it was the eighth consecutive quarter of positive cash flow from operations — with the company adding that it had $96 million cash on hand.

The company expects continued boosts in revenues during the third quarter of 2022 and throughout the year — especially as it bolster it’s operations at home and its springing European cannabis pharmacies in Austria and the U.K.; as well as breaking into the Australian medical cannabis market.

“Our teams delivered another strong quarter across all sectors, focusing on execution of our profitable growth strategy and fiscal discipline,” CFO Amos Cohen said. “With a strong balance sheet and over $96 million cash on hand, we are well positioned ahead of the consolidation process.”

We expect this growth to continue, while we remain focused and committed to expand our unique platform, building shareholder value and improving quality of life for patient communities,” said Rabinovitch.


Adam JacksonAugust 16, 2022
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Greenlane Holdings, Inc. (NASDAQ: GNLN) slumped in trading Tuesday morning with company revenue dropping, as it moves to offload its packaging division — KushCo — in order to reinvest in its brand houses and find more profits. The smoking accessory e-commerce platform reported financial results for the first quarter ending June 30, 2022.

Greenlane delivered approximately $39.9 million in total revenue during the period, falling from $46.5 million in the previous quarter and missing the Yahoo Finance Average analyst estimate for revenues of $50.33 million.

The company also reported a second-quarter net loss of $14.5 million versus an $18.75 million loss sequentially; and a net loss of $5.84 million in the same period last year, according to SEC filings. The earnings were for a loss of $2.27 per share — missing analyst expectations of a five-cent loss per share — versus a loss of $0.17 cents per share in the previous quarter.

“We have been very vocal about our plans to build the premier ancillary house of consumer brands, and we feel we are in pole position to achieve this goal,” company management said. “As we continue to execute on our plan, we intend to run a sales process and exit our packaging business. The packaging business is a thriving business, but one that ties up a lot of our resources, space, and working capital.

We expect to achieve significant proceeds from the sale of this business unit allowing us to generate substantial non-dilutive capital that will be re-invested into growing our consumer business. For Greenlane to complete our transition to a higher-margin, higher-value consumer business, it’s imperative that we further simplify and streamline our offering and focus on the upmost valuable pieces of our business, especially in today’s current climate.”

Greenlane posted an adjusted EBITDA loss of $5.8 million, or $1.09 per share, versus a loss of $3.7 million, or $3.92 per share, in the same period last year. Adjusted EBITDA loss was $11.1 million, or $2.25 per share for the first half of 2022, versus a loss of $8.9 million, or $11.05 per share during the corresponding period in 2021.

Gross margins were 20.3% during the quarter versus 26.1% during the second quarter last year and 16.3% during the first half of 2022 compared with 25.6% in 2021.

Dumping KushCo

The company said it plans to actively explore opportunities to sell its packaging business — KushCo — and reinvest in its consumer brands business. This comes alongside a series of moves the company has made over the past year in order to cut costs and become more profitable — including issuing layoffs, selling off its headquarters, and exiting its nicotine ventures; as well as reshaping senior leadership.

Tellingly, the earnings report did not list CEO Nick Kovacevich as the voice of the company statement. The quote gave no attribution and Kovacevich had been the CEO of KushCo prior to the merger. He assumed the role as the leader of Greenlane and today’s statement brings that role into question now. In addition to the absence of the CEO being mentioned in the statement, Greenlane did say it promoted Craig Snyder, the company’s Chief Commercial Officer, to President.

“This action comports with the Company’s strategy to build a world-class house of brands and serves to unlock the significant unrecognized value of its packaging business, which we believe is not properly priced in our market capitalization today and makes up approximately 15-20% of overall Company revenue,” the release said. “If a transaction or series of transactions are consummated, the sale is also expected to significantly reduce the Company’s working capital and warehousing requirements. We can provide no assurances as to the timing of this sale and will provide further updates as they are available.”

“As we move toward the sale of this division, we have already started realigning our senior leadership team to support the future Greenlane consumer business and further reduce expenses,” company management wrote. “Rodrigo de Oliveira, our current Chief Operating Officer, will be stepping down as COO at the end of September. Rodrigo was essential to the 2020 turnaround efforts at KushCo where we went from losing over $5M of aEBIDTA per quarter to achieving positive aEBIDTA several quarters later.

Following the merger of Greenlane and KushCo, Rodrigo utilized his extensive integration and transformation experience to help Greenlane properly integrate and reduce our costs and expenses. I would like to extend my sincerest thank you to Rodrigo. We would not be where we are today without his unwavering passion, work ethic and leadership!”

Yet, the company issued a cautionary statement for forward-looking statements include, “among others,” statements regarding; the company’s plans to sell its non-core assets and to exit its packaging business, the current and future performance of the company’s business, including comments relating to the company’s beliefs regarding its public market capitalization and valuation, the company’s expectations regarding capital raising and cost savings related to the 2022 plan and the company’s financial outlook and expectations.

“We are proud of the tremendous accomplishments we have achieved thus far,” the company wrote, “however; we consider these to be lagging indicators for future success, meaning the results of many of these initiatives have yet to fully impact our P&L. We expect to gain significant efficiencies from the efforts to simplify and streamline our business, improve our systems and go-to-market offerings, and fully recognize our lower operating costs.”


Adam JacksonAugust 16, 2022
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After the market closed on Monday, TPCO Holding Corp. (OTCQX: GRAMF) posted results that missed expectations as the company restructures and recovers from record lossesThe west-coast cannabis company delivered its financial results for the second quarter ending June 30, 2022.

The Parent Co. reported approximately $27.4 million in revenue during the period, a 27% loss versus the same period last year —  missing the Yahoo Finance Average analyst estimate for revenues of $33.23 million.

The Parent Co. also reported a second-quarter net loss of $30 million versus a $33.5 million loss sequentially; and a net loss of $734,000 in the same period last year. The earnings were for a loss of $0.30 per share, versus a gain of six cents per share in the previous quarter, according to SEDAR filings.

“Our team remains focused on our business transformation, and this quarter’s results are an early indication that our profitability improvement plan is working,” said CEO Troy Datcher. “As anticipated, our efforts to maximize the contributions from our omni-channel retail opportunities and minimize our exposure to the California wholesale market have significantly shifted our revenue mix. While this decision compressed topline sales, it drove solid Q2 gross margin of 24% compared to 9% in the prior year period as our omni-channel retail revenue grew 60% to account for 69% of our net sales in the quarter.”

Layoffs

As the company restructures, it has eliminated positions and undertaken a reduction in force intended to optimize the organization, which resulted in the elimination of approximately 17% of its workforce since the beginning of 2022, representing over $7.6 million in annualized payroll reductions which are included in $9.3 million total expense savings. In addition to the layoffs, The Parent Co is rethinking its delivery depot operations, which includes the recent exit of the Company’s Sacramento delivery operations, and the complete examination and outsourcing of all non-strategic capabilities.

Datcher added, “I am also pleased to report that since implementing the first phase of our long-term profitability plan, we have achieved $9.3 million in annual expense savings. In the next phase of the profitability plan there are additional major initiatives underway that are expected to help us reduce cash operating expenses by $30 million by year end. A key factor to achieving this goal is our new wholesale distribution agreement with Nabis, which will lower our annual operating expenses and expand our already-wide reach by introducing our premier brands to a larger potential base of customers. Similarly, our first out-of-state expansion agreement with Curio Wellness in Maryland is an important first step to growing our presence outside of the California market and introducing new markets to our premier west coast brands.”

The Parent Co. posted an adjusted EBITDA loss of $18.4 million. In addition, the company had unrestricted cash and cash equivalents totaling $126 million as of June 30, 2022.

The company generated $7.6 million in cash through the sale-leaseback of property, the sale of underutilized equipment and the settlement of outstanding litigation.

“Looking across our peer landscape, based on the strength of our balance sheet, the quality of our brands, and the retail experience we offer, we are the strongest positioned operator in an incredibly competitive marketplace,” said Datcher. “We firmly believe that the significant shift to more profitable revenue and implementation of our cost-saving strategic initiatives will be a winning strategy in the California market that better serves our customers and drives value for our shareholders.”


Adam JacksonAugust 15, 2022
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After the market closed on Monday, 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) posted positive results — buoyed by growth from lucrative M&A deals over the past year. The vertical multi-state operator announced its financial results for the second quarter ended June 30, 2022.

4Front delivered approximately $34.5 million in total revenue during the period, versus $34.4 million the same period last year — beating the Yahoo Finance Average analyst estimate for revenues of $27 million. The gain is primarily due to increased revenue in the company’s wholesale revenue as it ramps portions of its business in California, Illinois and Massachusetts.

The earnings per share remained at a loss of one cent — in line with both the pervious quarter and the same time last year.

“Throughout the second quarter and now halfway through the third quarter, we are seeing an acceleration of business trends within our growth markets, particularly in Massachusetts and California,” said CEO Leo Gontmakhert. “Our retail locations platform-wide maintained or gained market share, despite anticipated pricing headwinds as we continue to expand our customer base with new product innovations and quality improvements. We believe we are poised for a significant leg of growth to take place over the next 12 months as we leverage our investments in state-of-the-art automation and scaled manufacturing processes, supplemented by strategic and accretive M&A.”

4Front posted an adjusted EBITDA of $9.2 million in the quarter, up 23% from the same time last year — representing an adjusted EBITDA margin of 26.7%. The company said that continued growth of adjusted EBITDA and margins is expected to persist through 2023 as the company’s operations drive increased production and higher sales volumes without material increases to overhead.

The company had $6.0 million of cash and $49.5 million of related-party long-term debt not due until May, 2024. It has 636,636,686 subordinate voting shares outstanding.

4Front also announced that it has signed a definitive agreement to acquire the California-based Bloom Farms brands. The company said it will complete the transaction with Bloom Farms in the coming weeks, and expects to announce similar acquisitions over the next several quarters.

“In the distressed and fragmented California market, we are seeing increased interest from companies looking to 4Front as their low-cost producer of choice,” said Gontmakhert. “Our long-term plans are to deepen and expand these relationships to grow revenue over time and add a retail presence in the state.”

4Front said at the start of the fiscal year that 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.”

“After implementing new techniques and methodologies to our production processes in Massachusetts, we made notable improvements to the yield and quality of our flower across the country during Q2,” Gontmakhert said about the progress since then. “These new processes have now been incorporated in Massachusetts and Illinois, and we are currently applying them to our facilities in Washington. As the construction of Phase 1 of our Illinois cultivation and production facility nears completion, we are looking to expand our retail footprint in the state over the coming months in preparation for that facility to commence operations in 2023.”

“We are excited by the momentum we have seen so far in Q3, and I am convinced that the next twelve months will demonstrate the power of our model at significant scale, paving the way for robust, sustained growth in the long term,” said Gontmakhert.


Adam JacksonAugust 15, 2022
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Planet 13 Holdings (OTC: PLNHF) posted results that missed expectations — showing how waning demand and slimming margins are affecting even the largest operators.

The Nevada-based cannabis superstore delivered its financial results for the second quarter ending June 30, 2021.

Planet 13 reported approximately $28.4 million in revenue during the period, a 15.5% loss versus the same period last year — below analysts’ estimates for revenues of $33 million. Despite that, revenue this quarter is still up from $25.7 million in the previous period.

Planet 13 also reported a second-quarter net loss of $2 million versus a $2.1 million loss sequentially; and a net loss of $5.6 in the same period last year. The earnings were for a loss of once cent per share — beating analyst expectations of a three-cent loss per share — versus a loss of two cents per share in the previous quarter.

“Since we reported Q1 we’ve seen a material weakening of the consumer, which has impacted tourist spending in Nevada,” said Co-CEO Larry Scheffler. “Despite this, we have been able to maintain above 9% retail market share. We are taking steps as a Company to improve resiliency in the face of this new macro dynamic. During the quarter all of our brands held or gained share in Nevada according to research firm Headset. We also launched our owned brands in California for the first time, starting with the widely popular TRENDI products.”

The company posted an adjusted EBITDA of $3 million this quarter versus a loss of $7.2 million

Planet 13 had $52.6 million worth of cash on hand versus $61.6 million this time last year; total assets of $268.4 million as versus $216.8 million in the same period last year; total liabilities of $35.5 million versus $43.1 million in the same quarter last year.

“Q2 was a big quarter for advancing our growth initiatives,” said Co-CEO Bob Groesbeck. We secured our cultivation property in Florida. We entered into an option agreement to purchase the remaining ownership in our subsidiary which holds an Illinois dispensary license. In Nevada, consumption lounge legislation was finally passed and we’ve completed our premium, indoor cultivation expansion and are just waiting on final approvals. Our expansions are progressing according to plan and it is likely that a year from now we will have doubled our retail and state footprint.”


Adam JacksonAugust 15, 2022
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Rubicon Organics Inc. (OTCQX: ROMJF) delivered mostly positive results on Monday as the company begins to post profits — buoyed by its premium flower and pre-roll line. The Vancouver cultivator released its financial results for the second quarter ending June 30, 2022. Rubicon reported approximately $8.8 million in net revenue during the period, a 92% gain versus the same period last year.

According to SEDAR filings, the company also reported a second-quarter net loss of $1.2 million versus a $1.5 million loss in the previous quarter; and a net loss of $5.1 million in the same period last year. The earnings were for a loss of two cents per share, versus a loss of three cents per share in the previous quarter.

“Rubicon Organics has reached profitability due to the continued success of Simply Bare Organic as Canada’s #1 premium flower and pre-roll brand and the impressive market share gains of our newly launched mainstream brand 1964 Supply Co.,” said CEO Jesse McConnell. “Our production facility at the end of Q2 2022 was delivering yield run-rates capacity expectations of 10,000kg and we are beginning to realize the benefits of operating leverage as our production costs remain relatively flat, excluding some minor cost creep due to inflationary pressures…I am also pleased to increase our guidance to achieve positive Adjusted EBITDA for FY 2022 and as well as operating cash flow positive in the second half of 2022.”

Rubicon’s revenue grew $3.7 million over the quarter — representing year-on-year revenue growth of 92% and 61% over the three and six months of this fiscal year.

In total, it reported $11.6 million in total revenue. However, the company’s growth in concentrate sales triggered an increase in excise tax worth $2.76 million, according to Sedar filings — offsetting net revenue gains versus the prior year. Concentrates attract higher excise taxes as a percentage of revenue than flower products.

Rubicon posited a three-pillar strategy this year focused on yield and quality, improving product mix to optimize margin, and obtaining certifications for international access, “each of which we expect will have a positive impact on our profitability and cash flow.”

“Our strategy has proven successful as evidenced by Rubicon achieving 8.6%3 market share of the premium flower and pre-roll market in the second quarter of 2022,” the company said in the release. “We continue to expect the premium market to outpace the growth of the total market in Canada as it has done in other leader markets and believe that Rubicon Organics is well positioned to take advantage of this momentum as consumer preferences shift.”

The company sees itself as operating cash flow positive and adjusted EBITDA profitable for the rest of this year, too.

“The growth in the rate of sale of our Simply Bare Organic and our 1964 Supply Co. brands has led us to being one of the fastest growing licensed producers in Canada in Q2 2022,” McConnell said. “We expect to see our products in international markets in either late 2022 or the first part of 2023. ”


Adam JacksonAugust 15, 2022
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CV Sciences, Inc. (OTCQB: CVSI) sales fell in the quarter as demand for hemp-derived products continues to fade. The hemp operator announced its financial results for the quarter ending June 30, 2022.

CV Sciences delivered approximately $4.1 million in total revenue during the period, a loss of 19% versus the same period last year —  missing the Yahoo Finance Average analyst estimate for revenues of $4.88 million.

The company said that the decline is primarily due to lower sales in the retail channel. The total number of units sold during the second quarter also decreased 5% compared to the same time last year. Other reasons for the decline included higher discounts for new product placements and changes in our sales mix to lower priced products.

CV Sciences also reported a second-quarter net loss of $2.7 million versus a $3 million loss sequentially; and a net loss of $3.5 million in the same period last year. The earnings were for a loss of two cents per share, versus a loss of three cents per share in the previous quarter.

“Second quarter results met our expectations and we are encouraged by improvements in the retail channel and very positive consumer response to several new product launches,” said CEO Joseph Dowling.

CV Sciences posted a gross margin of 30.7% for the second quarter versus 44.7% for the second quarter last year.

The operating loss fell to $2.3 million in the second quarter of 2022 versus an operating loss of $3.5 million in the second quarter of last year — mostly due to reductions in its selling, general and administrative expenses. The company posted an adjusted EBITDA loss of $1.8 million versus an adjusted EBITDA loss of $2.4 million in the second quarter last year. Last quarter’s figure was $2.5 million.

The company said it had a total cash balance of $1.1 million at quarter end, versus $1.4 million at year-end.

Despite the revenue loss, CV Sciences reiterated its position as a top-selling hemp extract brand in the natural product retail sales channel, according to SPINS scan data.

The company said it will continue to evaluate strategic review of its business, “including consideration of inbound and outbound merger, sale, acquisition or other options for the Company as a whole or for any business segments.”

“Our new OTC products, along with our Reserve Collection and Wellness Line of products are evidence of our strong pipeline, and demonstrate our ability to develop innovative products that address the need states of our consumers,” Dowling said. “Our flagship PlusCBD brand continues to gain market share in the natural product channel, and, with our portfolio of high-quality, proven products, and favorable regulatory momentum, we believe the Company is positioned for future growth.”


Adam JacksonAugust 15, 2022
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SNDL Inc. (NASDAQ: SNDL)  posted positive results as the company reaps record revenue from this year’s M&A bets. The Canadian vice operator — formerly known as Sundial Growers Inc. — delivered its second-quarter results ending June 30, 2022.

SNDL reported approximately $223.7 million in total revenue during the period, a 2,344% gain versus the same period last year; well over the Yahoo Finance Average analyst estimate for revenues of $162.6 million.

This comes after the company in March acquired a 63% majority stake in Nova — making SNDL the largest private sector cannabis and liquor retailer in Canada.

The company also reported a second-quarter net loss of $74 million versus a net loss of $52.3 million in the same period last year. The earnings were for a loss of $0.31 cents per share, according to SEDAR filings, versus an earnings loss of $0.23 cents a share during the same time last year.

“The SNDL team’s dedication and perseverance have enabled us to make significant progress on our journey to becoming Canada’s largest private sector distributor of both liquor and cannabis,” said CEO Zach George. “We believe our unique asset base and balance sheet strength represent competitive advantages that we are determined to leverage for the benefit of our stakeholders.”

The increased loss of $21.7 million sequentially was due to investment losses ($37.4 million), the share of loss of equity-accounted investees ($41.7 million), higher general and administrative expenses ($30.2 million), depreciation and amortization ($7.9 million) as well as finance costs ($26.5 million) — partially offset by an increase in gross margin ($45.8 million), lower asset impairment ($58.2 million), lower transaction costs ($8.7 million) and a positive change in fair value of derivative warrant liabilities ($3.8 million).

Adjusted EBITDA across segments was a loss of $25.9 million for the quarter, versus a loss of $200,000 in the same period last year, driven primarily by the Sunstream equity pickup of a $38M loss.

The company also added that the adjusted EBITDA loss was primarily due to its recent reverse stock split — which it needed to continue listing its shares on the Nasdaq — as well as an increase in general and administrative expenses due to the inclusion of Alcanna and Spiritleaf as well as a decrease in realized gain on marketable securities. The decrease was partially offset by an increase in gross margin including Alcanna and Spiritleaf, it said.

Cannabis Segments

For its cannabis retail sector, the company included Nova’s Value Buds sales totaling $63.5 million versus $7.5 million in the first quarter of 2022, a 746% increase. Value Buds sales were the material driver of the increase with $56.3 million of revenue.

Gross revenue from the cannabis cultivation and production segment for the second quarter of 2022 was $15.4 million versus $11.3 million in the previous quarter, a 36% sequential improvement and a 21% year-over-year improvement.

SNDL reported an $8 million net loss for the segment during the second quarter versus a $75.4 million loss in the second quarter last year.

Adjusted EBITDA in the cannabis cultivation and production segment was $3.4 million versus a loss of $11.0 million in the same period last year.

This represents SNDL’s first positive adjusted EBITDA quarter in the cannabis cultivation and production segment, the company said, adding “The significant improvement in Adjusted EBITDA can be attributed to higher sales volumes, improved margin on an adjusted basis, reductions to SMG&A, and greater discipline over inventory management driving a reduction in price discounts for provincial board sales during the first half of 2022.”

“We are seeing market share gains through our retail network and this quarter our cannabis operations generated positive adjusted EBITDA for the first time in the Company’s history,” George said. “We continue to strengthen and transform our business while benefitting from vertical integration across our business segments under a shared services model with integration work expected to impact results over the next two quarters.”

Newly-Acquired Liquor Vertical

Gross revenue from liquor retail sales for the three banners — “Wine and Beyond”, “Liquor Depot” and “Ace Liquor”  — combined was $148.6 million for the second quarter.

SNDL said the gross margin in the liquor retail segment was $33.5 million, or 22.6% of sales.

On the liquor side, the company said it stabilized its margin through a pricing and mix strategy in the second quarter — despite fluctuations in sales due to market conditions and retail competition.

While customer count is down by 5% year-to-date, largely due to a return to on-premises consumption in a post COVID-19 environment, the average basket size is up 2%. SNDL said it sees larger basket sizes at their Wine & Beyond locations, where consumers come for the experiential, destination shopping approach to liquor retail.

SNDL’s liquor banners’ market share in Alberta was 17.6% in the second quarter of 2022, with Wine & Beyond representing 2.9% with only 11 stores, “showcasing the continued and increasing popularity of the banner.” SNDL is exploring opportunities to expand the Wine & Beyond store footprint in Alberta, British Columbia, and Saskatchewan.

“Moving forward, the company will seek to optimize profitability and cash flow for the liquor retail segment by focusing on cost discipline, margin accretive products, monetizing intellectual property, and leveraging its retail footprint to develop an e-commerce platform,” it said.

Looking Ahead

Revenue from the investments segment for the second quarter was a loss of $35.1 million, versus $2.4 million in the second quarter last year. The company said the decrease was primarily due to “accounting fair value adjustments reflecting an increase in the assumed risk-free rate and the deterioration in overall cannabis credit market conditions.”

The company also said it possesses an unrestricted cash balance of $363 million and $334.9 million, respectively, and a total of 238 million post-consolidation shares outstanding as of August 11, 2022.

SNDL said it remains focused on “building long-term shareholder value through vertical integration, the accretive deployment of cash resources, the expansion of its retail distribution network, the further streamlining of the company’s operating structure as well as the enhanced offering of high-quality brands.”

“Despite our encouraging results, we know there is still room for improvement, and we remain humbled by the opportunity before us,” George said. “SNDL represents an opportunity for investors to gain exposure to North American regulated products in a manner that does not exist with any other public company today. We will continue to prioritize free cash flow generation with a focus on strengthening our distribution platform and using our credit portfolios to turn industry headwinds into long-term opportunities.”


Adam JacksonAugust 15, 2022
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Agrify Corporation (Nasdaq: AGFY) up-ticked in early trading Monday despite the company posting results far below analysts’ expectations — showing the waning demand for hydroponics amid the economic slowdown.

The data-forward cannabis cultivator delivered its financial results for the first quarter ending June 30, 2022. Agrify delivered approximately $19.3 million in total revenue during the period, a gain of 63.5% versus the same period last year — though missing the Yahoo Finance Average analyst estimate for revenues of $26.1 million.

The company also reported a second-quarter net loss of $93.4 million versus a net loss of $9.4 million in the same period last year. The earnings were for a loss of $3.51 per share, below analysts’ loss estimates of $0.43 cents a share.

“The second quarter was challenging for the entire cannabis industry,” said CEO Raymond Chang. “Despite this difficult business environment, which has impacted our recent performance and altered our outlook for the remainder of 2022, we are actively taking steps to adapt to the new market realities.

Agrify said that its operating expenses totaled $93.1 million for the second quarter versus $6.0 million in the prior year period. Operating expenses were $107.1 million for the year-to-date period versus $11.9 million in the prior year-to-date period.

“The comparative 2022 increases in both our second quarter and year-to-date operating expenses are largely attributable to impairment charges of $69.9 million, increases to reserves associated with accounts receivable, loans receivable, inventory obsolescence, and warranty costs, increases in depreciation and amortization, and changes in contingent consideration related to the fair value estimates associated with ongoing acquisition-related earnout arrangements,” the company said.

Agrify is lowering its guidance for 2022 revenue, “Given the current difficult macro business environment, and specifically a drastic downturn in the cannabis industry,” it said in a preliminary release statement last week. Agrify’s new forecasted range for revenue is $70 million$75 million, far below a range of $140 million and $142 million in the previous quarter.

Adjusted EBITDA was a loss of $19.4 million in the second quarter of 2022, versus a loss of $4.5 million in the same period last year.

“We have adjusted our near-term strategy and priorities to focus on the most immediate and impactful revenue-generating opportunities, all without compromising our ability to capitalize on the expected long-term growth in the sector,” Chang said. “In parallel, we are also in the process of restructuring our credit facility and reducing our operating expenses to strengthen our cash position. We remain steadfast on bringing new and innovative solutions to our customers and delivering value to our stakeholders.”

Warning Signals

Last week, the company gave the market a heads-up that it took a big write-off in the quarter, saying it is conducting an impairment analysis. That write-off is expected to result in “significant non-cash impairment charges.” In addition to the write-downs, Agrify said it talked to its lenders to change some of the financial covenants regarding its debt.

Stifel analysts Andrew Carter and Christopher Growe earlier the month published an earnings preview report, saying that the  “2021/2022 hydroponics recession has been deeper and longer than we originally anticipated with a significantly greater impact to our covered companies than we originally anticipated.”

“But, we contend the hydroponics category will at minimum regress to the underlying demand for cannabis (HSD) with an improvement in durables demand eventually taking hold,” Carter said, adding that he believes it will take time for enthusiasm to return to the sector of hydroponics.


Adam JacksonAugust 12, 2022
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Schwazze (OTCQX: SHWZ) posted positive results on Thursday as the company expands in its quest to become a commanding regional MSO.

The Colorado-based seed-to-sale operator — formerly known as Medicine Man Technologies — delivered its second-quarter financial report card ending June 30, 2022.

Schwazze delivered approximately $44.3 million in total revenue during the period, a 44% gain versus the same period last year — right in line with the Yahoo Finance Average analyst estimate for revenues of $44.26 million.

The company said that the increase was due to rising sales of its products as well as revenue from its new retail acquisitions. Additionally, the company is finding profits in newly-recreational markets such as New Mexico since April.

Schwazze said that wholesale revenues in Colorado decreased due to “increased cultivation capacity in the state resulting in an over-supply of wholesale cannabis materials.”

The company also reported a net income of $33.8 million versus a net loss of $4.4 million in the same period last year. The gain is a reversal after losing $26.8 million in the previous quarter.

Diluted earnings per share in the fourth quarter was $0.24 cents versus diluted earnings per share of eight cents in the same period last year — above a diluted loss per share of six cents in the previous quarter, according to SEDAR filings.

“Similar to the rest of the country, the cannabis industry in Colorado is also experiencing a slowdown in growth compared to the last couple of years,” CEO Justin Dye said. “Schwazze, however, is demonstrating that our regional strategy, built on a customer-first approach, developing significant scale, building brands, and leveraging data analytics and technology is not only sound but gaining momentum as demonstrated by revenue and unit sales growth, customer loyalty and by once again outpacing the legacy market growth by approximately 12%.

We believe this model will travel well to other states as we find attractive opportunities. Despite share price weakness driven by broader market influences, we remain bullish on our business and have conviction that as Schwazze continues to deliver superior operating results that our shareholders will be rewarded.”

Schwazze is lowering its guidance for 2022 revenue, citing “challenging Colorado market conditions.” Schwazze’s new forecasted range for revenue is $175 million$200 million, far below a range of $220 and $260 in the previous quarter. Adjusted EBITDA guidance is estimated to be $60 million$72 million, down from previous quarter expectations of $70 to $82 million profit.

“During Q2 we focused on completing integration of our acquisitions and made sure that we used our resources effectively,” said CFO Nancy Huber. “We are focused on reducing operating and SG&A expenses and judiciously investing growth capital to ensure adequate liquidity and profitability despite difficult market conditions in Colorado, which we believe to be transitory and temporary. Our balance sheet remains strong, and we have ample liquidity.”

“We are focused on delivering positive cash flow net of acquisition costs for the year while driving organic growth and making smart acquisitions,” she added.

Adjusted EBITDA was $15 million in the second quarter of 2022, versus earnings of $10 million in the same period last year.

Seeing It Through

The dialogue from leadership this quarter is one a bit more optimistic than the previous.

“As we continued our successful transformation into a Regional MSO in the first quarter of 2022, we met certain challenges, including the comparison cycling of an inflated Q1 2021, which was aided by stimulus checks and COVID lockdowns,” Dye said at the time. “Colorado’s high COVID rates during Q1 2022 also impacted sales and internal staff. The devastating Marshall Fires in and around Boulder in January of this year, caused one store to temporarily close and the store has been further impacted due to a displaced population in and around Boulder County.

Also, overall sales and a decrease in wholesale revenue was largely impacted by wholesale distillate pricing pressure and over-supply in the state of Colorado.”

Dye at the time did, however, express that he remained optimistic that the company would see rising profits as its expansion efforts bore fruit in emerging state markets.

Cannabis deal tracker Viridian Capital Advisors issued a “Buy” rating at a $2.55 price target for the company in last September, calling Schwazze a “profitable and cash generating operator in Colorado with a meaningful and scaling presence in the to-date fragmented state,” wrote Director of Equity Research Jonathan DeCourcey.

“We expect MSOs to increasingly target large established markets like Colorado to support growth in the absence of interstate sales,” DeCourcey wrote. “Furthermore we expect expansion to come in the form of large scale acquisitions of companies that can be plug-and-play contributors to results in order to excite investors and boost valuations. We believe GAGE’s recent takeout by Terrascend and Harvest’s Trulieve deal highlight this theme.

In our view, Schwazze would be a solid takeout candidate for any MSO with Colorado aspirations. We believe even the perception of an acquisition is likely to drive upside in the stock from current levels.”


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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