Goodness Growth Archives - Green Market Report

StaffSeptember 28, 2021


Goodness Growth Holdings, Inc.  (CSE: GDNS)(OTCQX: GDNSF) closed on a sale/leaseback deal with Innovative Industrial Properties, Inc. (IIP) (NYSE: IIPR) in New York. Goodness Growth reported that it sold IIP approximately 92.3 acres of land for $1.2 million. The site is next to Goodness Growth’s existing cannabis cultivation and processing facility in Johnstown, New York, which was formerly the site of a juvenile detention center. IIP said it plans to provide a tenant improvement reimbursement to Goodness Growth of roughly $55 million for the construction of a new 324,000 square foot cannabis cultivation, processing, and research and development facility.

“We are looking forward to beginning construction on this state-of-the-art facility in New York, which will immediately become the flagship cultivation and processing facility in our Company’s portfolio,” said Goodness Growth Chairman and Chief Executive Officer, Kyle Kingsley, M.D. “This facility will produce the highest-quality indoor flower we’ve ever produced and help prepare our business for the massive spike in demand expected when New York’s adult-use cannabis program goes online next year. This facility will also support the expansion of our retail network in New York as we look to open up to four new dispensaries next year, which would bring our total number of stores in New York to eight.”

Goodness Growth and IIP isad they will partner on the development of the project and will amend the terms of their existing lease agreement to incorporate the new facility. The initial annualized base rent will be 10.5% of the tenant improvement budget plus the purchase price, for a term of twenty years. The lease amendment contains a rent escalation clause that is triggered in the event that Goodness Growth doesn’t satisfy certain strategic benchmarks, which would increase the rent by 1.5%.

Goodness Growth is one of ten licensed operators in New York’s medical cannabis program. It was previously known as Vireo Health, but the company changed its name this past summer.  It currently operates four dispensaries in QueensWhite PlainsAlbany and Binghamton under the Vireo Health name, as well as its home delivery business which serves the New York City metro area. The company said it plans to rebrand all its dispensaries in New York to its Green Goods national dispensary brand after the onset of the adult-use program next year.

Goodness Growth also forecasts that it expects to generate total revenue in the range of $140 to $180 million in its fiscal year 2022 and that it expects to generate adjusted EBITDA in the range of $35 to $55 million in the fiscal year 2022.

StaffAugust 13, 2021


Goodness Growth Holdings, Inc.  (OTCQX: GDNSF) reported financial results for its second quarter ended June 30, 2021, as revenue jumped 16.5% to $14.2 million over last year. The net loss for the quarter was $5.5 million, down from last year’s net loss of $16.1 million for the same time period. Goodness Growth said the improvement was driven by the increase in gross profit margin and lower operating and other expenses, partially offset by increased income tax expense.

Goodness Growth stated that excluding results from its former subsidiaries in Pennsylvania, revenue increased 44.5 % versus the 2020 second quarter.

The company said that retail revenue excluding Pennsylvania increased 35.7 % to $11.3 million in the quarter and reflected growth in each of its retail markets. Wholesale revenue, excluding Pennsylvania and Ohio, increased by 92.1% to $2.9 million, driven by strong growth in Arizona and New York.

“Our second quarter performance was in line with our expectations, and we were pleased to see increased scale and efficiency of operations contribute to record gross margin performance during the quarter,” said Chairman and Chief Executive Officer, Kyle Kingsley, M.D. “As we discussed on last quarter’s call, our wholesale performance in Maryland was temporarily impacted by the move to our recently completed state-of-the-art manufacturing facility, and we expect to see that facility reach normalized production levels during the third quarter of this year. Additionally, our expansion projects in New Mexico and Arizona will help strengthen revenue and profitability in the second half of this year, especially in the fourth quarter when the expansion projects are operating at full capacity.”

The company was able to reduce the total operating expenses in the second quarter to $10.2 million, a drop of $5.5 million as compared to $15.6 million in the second quarter of 2020. The decrease in total expenses was attributable to a decrease in stock- based compensation expenses, partially offset by increased general and administrative expenses which was driven by operational buildouts in Arizona and Maryland, where the Company is in the process of completing large cultivation and manufacturing expansion projects.

Dr. Kingsley continued, “Our operating teams are focused on flower production, strain variety and quality in all of our markets, and we’re continuing to make progress on our expansion plans in New York and we will share updates on these plans throughout the year. As a reminder, the recent passage of adult-use legislation in New York and New Mexico and the inclusion of flower to Minnesota’s medical program have substantially improved our long-term outlook in each of these markets.”

The company said it expects to open an additional 6-10 Green Goods retail dispensaries, and a majority of the Company’s markets are expected to begin to generate more substantial revenue growth as pending changes to regulatory regimes take effect.

Goodness Growth also appointed Josh Rosen to its Board of Directors, expanding its number of board seats to seven. Josh Rosen is Managing Partner at Bengal Capital, and former Chief Executive Officer and Chairman of 4Front Ventures, a multi-state U.S. cannabis operator.

Debra BorchardtJune 9, 2021


Vireo Health International, Inc.  (CSE: VREO; OTCQX: VREOF) announced at this week’s investor day event that it is changing its name to Goodness Growth Holdings, Inc. The company is also changing its ticker symbol to “GDNS” on the Canadian Securities Exchange (CSE: GDNS) and on the OTCQX Market in the United States the ticker symbol will be “GDNSF” (OTCQX: GDNSF).

“Our evolution to Goodness Growth reflects the progression of our business from a predominantly early-stage, medical-market operator to one of the strongest organic growth generators across recreational-use and medical cannabis markets in the United States,” said Chairman and Chief Executive Officer, Kyle Kingsley, M.D. “Vireo always has been and will continue to be a flagship brand of medical products, but this holding company model reflects a much more expansive view of our future and clearly differentiates our plant-touching assets from our science and IP incubator, Resurgent Biosciences.”

2022 Strategy

Goodness Growth unveiled a Horizon strategy, which is its plan for growth through the fiscal year 2022. Over this timeframe, the company said it expects to open an additional 6-10 Green Goods retail dispensaries. The company also provided several additional outlook which are dependent on the on-time completion of various development projects, plus the beginning of adult-use cannabis sales in New Mexico beginning in Q1 of 2022, the start of adult-use sales in New York in the summer of 2022, and the launch of flower sales in the Minnesota medical market in the spring of 2022. The estimates are as follows:

  • The company expects to generate total revenue in the range of $140 to $180 million in FY22
  • The company expects to generate adjusted EBITDA in the range of $35 to $55 million in FY22
  • Management reminds investors that the company had approximately $40 million in cash on its balance sheet as of March 31, 2021
  • Management expects net capex, excluding financing from real estate partners, to be in the range of approximately $15 to $20 million over this planning horizon
  • The company expects to begin generating positive cash flow from operations during 1H22

Dr. Kingsley continued, “We expect that recent growth investments we’ve made, combined with the expansion projects we have planned, and growth catalysts driven by changing regulatory frameworks will result in substantial improvements in revenue growth and profitability over the next 18 months. We expect to support this more than tripling of our revenue through an increase of more than 300 percent in biomass production capacity as we execute the Horizon strategy and are pleased to be showcasing the potential of our asset portfolio to investors at our investor day events later tonight and tomorrow morning.”


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