Goodness Growth Holdings, Inc. (CSE: GDNS)(OTCQX: GDNSF) reported financial results for its fourth quarter and full-year ending December 31, 2021. Total revenue in the fourth quarter was $13.7 million, an increase of 10.5% versus the same time period in 2020. Excluding contributions from Pennsylvania, Ohio, and Arizona retail, total revenue increased 23.8%. Retail revenue excluding Arizona and Pennsylvania increased 33.8 percent to $10.8 million in Q4 2021 and reflected growth in each of the Company’s other retail markets. Wholesale revenue, excluding Pennsylvania and Ohio, declined by 5.6% to $2.2 million, with the decline primarily driven by the continued impact of crop loss in Arizona which occurred during the third quarter, partially offset by growth in New York and Maryland.
Goodness Growth also reported a net loss in the quarter of $12.7 million, versus a loss of $2.3 million in 2020 for the same time period. The company attributed the increase to higher production costs, operating, and other expenses, offset partially by the gain on the disposition of the company’s former dispensary in Arizona during the quarter.
“Our fourth-quarter results reflected continued growth across most of our markets, but we continued to experience the negative impact of crop loss in Arizona we’ve previously discussed which occurred during the third quarter,” said Chairman and Chief Executive Officer, Kyle Kingsley, M.D. “Wholesale sales in Arizona increased sequentially as compared to Q3, but the loss of biomass continued to impact gross margin performance. Revenue increased across the rest of our operating markets in Q4, and we’re looking forward to contributions from flower sales beginning in Minnesota in Q1 and adult-use sales in New Mexico in Q2.”
2021 Full Year Results
Goodness Growth reported total revenues increased by 10.6% over last year to $54.4 million, including the company’s former subsidiaries in Pennsylvania and Ohio, and its former dispensary in Arizona. Excluding contributions from Pennsylvania, Ohio, and Arizona retail, full-year revenue increased 30.8%. Retail revenue excluding Arizona and Pennsylvania increased 33.3% to $39.6 million in 2021 and reflected growth in each of the company’s retail markets. Wholesale revenue, excluding Pennsylvania and Ohio, increased by 21.3% to $9.7 million. The net loss in 2021 was $33.7 million, compared to a loss of $22.9 million in the fiscal year 2020. The variance compared to the prior year was driven by increased operating and other expenses and higher interest expenses, as well as the non-recurrence of the gain on disposition of assets in the prior year.
Total operating expenses were $40.3 million, or roughly flat compared to $40.2 million in the fiscal year 2020. Increases in salaries and wages, professional fees, general and administrative expenses, and amortization and depreciation expenses were offset by a reduction in share-based compensation as compared to the prior year. The increase in salaries and wages, and general and administrative expenses were driven by significant operational buildout across the Company’s various operating markets, and the reduction in share-based compensation was driven by the non-recurrence of warrant vesting which occurred in the fiscal year 2020.
“Smokeable flower sales began in Minnesota’s medical market on March 1, and early indications suggest Minnesota flower sales will be our strongest driver of revenue growth until adult-use sales commence in the State of New York. We continue to focus on the development of our new dispensaries in New York, as well as the construction of our new indoor cultivation facility, and expect these activities to continue through the closing of the previously-announced, pending transaction to be acquired by Verano Holdings Corp. Finally, given this pending transaction, we no longer intend to provide frequent updates of our future performance expectations, and as a result, are withdrawing our previous outlook at this time.”
On February 1, 2022, goodness Growth announced that it has entered into a deal to be acquired by Verano Holdings Corp. in an all-share transaction valued at the time of announcement of approximately $413 million on a fully-diluted basis.