The Parent Company Archives - Green Market Report

After the market closed on Thursday, TPCO Holding Corp.  (NEO: GRAM.U) (OTCQX: GRAMF) delivered its financial results for the fourth quarter and the full year ending December 31, 2021 as the company continues to record huge losses. In the fourth quarter, The Parent Company’s net sales were $39.6 million with a net loss of $50.6 million. The sales were essentially flat from the third quarter where sales were $39.7 million. The adjusted EBITDA loss for the quarter was $27.5 million.

Full Year Results

While net sales for the fiscal year 2021 were a healthy $173.4 million, the net loss was an eye-popping $587 million. DTC revenue for the year was $54.2 million or 31% of sales. Wholesale revenue for the fiscal year 2021 was $119.2 million of 69% of sales. Gross profit for 2021 was $20.2 million or 12% of net sales. The adjusted EBITDA loss for 2021 was $62 million. Since 2020, the company has logged losses of $818 million.

“2021 was a foundational year, as we developed an integrated omnichannel retail platform that provides us with direct access to over 80% of California’s adult population, positioning us to execute on our goal of becoming the number one choice for consumers by providing for both ease of access and high-quality innovative cannabis products,” said CEO Troy Datcher. “We have added significant talent to our organization, including industry experts and seasoned professionals that provide us with the depth of knowledge and expertise we need to lead in this market. While the challenges in the California market remain, including low bulk wholesale flower and oil pricing, high taxes, and persisting illicit market, we have successfully begun to pivot our focus to our higher margin direct to consumer revenue, doubling DTC revenue as a percentage of sales between the first and fourth quarters. Today more than ever, we believe we are well-positioned to win by leveraging our high-quality indoor-grown cannabis, strong consumer brands, and direct retail insights to innovate, create, and launch new products directly into the market that today’s consumers demand.”

Mr. Datcher added, “With our consumer-first approach, state-wide DTC retail footprint, robust branded products portfolio, and focus on higher-value revenue streams, our priority for the remainder of the year will be preserving our strong balance sheet by reducing our cash burn while utilizing our DTC focus to drive improved margin to generate long-term value for our shareholders. Given our progress in 2021 and subject to any opportunistic partnership or acquisition transactions, we have set a goal to maintain a minimum cash balance of approximately $100 million at 2022 year-end, sufficient to sustain our business for a minimum of three years, and pivot to generating positive cash flow in the fiscal year 2023.”

Direct to Consumer includes in-store retail, pick up, and delivery. The company currently operates eleven omnichannel retail locations, three in Northern California, three in Central California, and five in Southern California along with six delivery hubs (including the Coastal Holding Company, LLC acquisition.) On the wholesale side, TPCO sells first-party and selected third-party products into 450 dispensaries across California. Additional wholesale revenue comes from sales of sourced bulk flower and oil produced in-house.

Unrestricted cash and cash equivalents totaled $165.3 million as of December 31, 2021. Since closing the company’s qualifying transaction, the company has invested $48.8 million in acquisitions and capital investments, $6.5 million to repurchase its own shares, and $81.9 million or an average of $6.8 million of cash per month on operations as it integrates and scales its businesses.