Flower One Holdings Inc. Archives - Green Market Report

Adam JacksonAugust 30, 2022
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It was near midnight on Monday when Flower One Holdings Inc. (CSE: FONE) (OTCQB: FLOOF) posted results that missed expectations as the company reels from consecutive periods of revenue drop amid financing concerns. The Nevada-based cannabis cultivator and producer released its financial report card for the second quarter ending June 30, 2022.

The company reported revenue of $7.9 million in the second quarter — below the Yahoo Finance Average analyst estimate for revenues of $9.6 million.

The company lent its woes to some of the same issues stated in the previous quarter, citing the pandemic’s effects on Nevada’s cannabis market in addition to a “thriving” illicit market, which has resulted in price compression and decreased statewide cannabis sales.  Tourist activity in the state has continued to slowly rebound to pre-pandemic levels, it said, though still remains far below company expectations amid the reductions in conferences, corporate and international travel.

The company posted a net loss of $5.4 million for the quarter, versus a net loss of $1 million for the same period last year. The earnings were a loss of one cent per share, in line with Yahoo estimates.

“Despite best efforts from our team to continue to produce the best quality cannabis we can at the lowest possible price, we face significant market pressures and with our current cash burn rate we must continue to explore all avenues to source working capital, and there is no guarantee that the company will receive this funding,” said CEO Kellen O’Keefe.

Cost of sales for the second quarter was $6.9 million, versus $11 million from the same period last year. The company said that the drop in gross margin is a direct result of wholesale price compression driven by top-line market softening and increased supply.

Second quarter 2022 gross profit before fair value adjustments was $1 million, versus $7.2 million from the same quarter last year. The company said that the drop in gross profit is directly attributable to wholesale price compression, “as well as an increase in consumer incentives, such as pricing discounts and other promotions, in order to maintain market position for both in-house and brand partner products.”

Going Concern

In Flower One’s filing, the company said that it needs “adequate capital resources” to support its ongoing operations and development, adding that assessing its viability as a company “requires judgments about the company’s ability to execute its strategy by funding future working capital requirements.”

The company had cash and cash equivalents of $3.6 million, versus $2.2 million in the same period last year. The company’s overall liability balance has increased by $11.9 million since the end of last year. The company’s total liabilities are $138 million.

“While still navigating through a challenging global economic environment, we continue to strengthen and refine our ability to decrease and control our costs,” said CFO Araxie Grant. “In the second quarter we significantly reduced our operating expenses, and continue to practice the financial discipline required to give the company the chance to achieve positive cash flow.”


William SumnerMarch 28, 2019
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It’s time for your Daily Hit of cannabis financial news for March 28, 2019.

On the Site

CannTrust Holdings Inc.

Sales are up, but profits are on the decline for CannTrust Holdings Inc. (NYSE: CTST) as the company releases their financial results for the fourth quarter and year ending on December 31, 2018.

SAFE Banking Act Advances As Committee Votes For Approval

The House Financial Services Committee voted 45 to 15 to advance the Secure and Fair Enforcement (SAFE) Banking Act. Currently, Federal law prohibits banks from providing banking services to cannabis companies since cannabis is illegal despite some states legalizing cannabis.

In Other News

MJIC Inc.

MJIC Inc. announced today that it would change its name to ManifestSeven. The company is rebranding itself as part of its preparation to go public in Canada in the first half of 2019. “Our new name – ManifestSeven – speaks to the evolution of our company and the destiny of legal, compliant cannabis in the United States,” said Sturges Karban, ManifestSeven’s Chief Executive Officer and Director. “As we prepare to enter the public markets, we are already seamlessly integrating fully compliant operations across California, creating the cannabis industry’s first omnichannel distribution and retail superhighway. Our name change speaks to our ambition to continue growing in California and other markets as they legalize across other states.”

Aurora Cannabis Inc.

Aurora Cannabis Inc. (NYSE: ACB) announced that the company has added product information numbers (PINs) to 78 medical cannabis products. The PINs are meant to help track insurance coverage for medical cannabis patients. Patients hoping to submit health insurance claims to third party providers will be able to specifically identify the products they use, which in turn will theoretically help speed up the coverage process.

Flower One Holdings Inc.

Flower One Holdings Inc.  (CSE: FONE) announced that it has closed its previously announced public offering of unsecured convertible debenture units of the company. Issuing 50,000 units as a priced of $1,000, the company raised $50 million. The net proceeds of the offering will go towards working capital, general corporate purposes, finishing the development and construction of a production facility in Nevada, and the payment of outstanding notes.

Newstrike Brands Ltd.

Newstrike Brands Ltd. (TSXV: HIP) announced that it will invest $5 million in Green Tank Technologies, a manufacturer of cannabis vaporizer hardware and technology. “. Our strategic investment in Green Tank puts us in a strong position to become a preferred supplier of end-to-end vape solutions to the adult use recreational market,” said Mark E. Burton, Chief Strategy Officer, Newstrike Brands.


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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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