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.