The Daily Hit: April 27, 2021

It’s time for your Daily Hit of cannabis financial news for April 27, 2021.

On the Site

Fire & Flower

Fire & Flower Holdings Corp. (OTCQX: FFLWF) announced its financial and operational results for the fiscal year and quarter ending January 30, 2021. In the fourth fiscal quarter, Fire & Flower reported total revenue of $43.2 million versus revenue of $16.8 million for the fourth quarter of 2019. It was an increase in revenue of 30.5% and an increase of 42.8% in total gross profit dollars compared to the third quarter of 2020.

The company said that it was the second consecutive quarter of positive Adjusted EBITDA of $1.5 million as compared to $1.2 million of positive Adjusted EBITDA in the third quarter of 2020 and negative Adjusted EBITDA loss of $5.26 million for the fourth quarter of 2019. The net loss for the quarter was $11.4 million a decline of 49% from last year’s net loss of $22 million.

Valens

The Valens Company Inc.  (OTCQX: VLNCF) is buying Green Roads and its majority-owned manufacturing subsidiary in a deal potentially valued at $60 million. The price consists of $40 million, plus up to an additional $20 million in contingent consideration payable upon the business achieving certain EBITDA milestones. The deal will initially be done through a $25.4 million issuance in common shares and up to $14.6 million in cash.

Valens said that the Green Roads acquisition is expected to be accretive in 2021. If all the milestones are met in 2022, the deal represents approximately 4.5x fiscal 2022 EBITDA. On a pro forma basis, the combination would result in a business with total revenue of C$111.6M in 2020.

Pennsylvania

Pennsylvania has only legalized medical marijuana, but the numbers make it look as if it is adult use cannabis driving the sales. Cannabis data company Headset recently expanded its reach into Pennsylvania and published its first full market report based on consumer insights and real-time market data. The report found that over the past twelve months, Pennsylvania’s medical cannabis sales have escalated, and between April 2020 and March 2021, Pennsylvania’s medical markets brought in $909.4 million. Medical sales grew 120% in the first quarter of 2021 to $267.8 million from last year’s $121.5 million for the same time period.

In Other News

Turning Point

Turning Point Brands, Inc. (NYSE: TPB) announced financial results for the first quarter ended March 31, 2021. 

  • Net sales increased 18.7% to $107.6 million
  • Gross profit increased 28.6% to $53.3 million
  • Net income increased $7.3 million to $11.8 million
  • Adjusted EBITDA increased 57.4% to $28.0 million (see Schedule A for a reconciliation to net income)
  • Diluted EPS of $0.57 and Adjusted Diluted EPS of $0.80 as compared to $0.22 and $0.51 in the year-ago period, respectively (see Schedule B for a reconciliation to Diluted EPS)

“Our first quarter results demonstrated solid execution with year-over-year growth significantly outpacing our end markets,” said Larry Wexler, President and CEO, Turning Point Brands. “Zig-Zag led the way with a second consecutive quarter with over 40 percent growth, and Stoker’s delivered another double-digit growth quarter led by our MST business. As such, our core segments are continuing to perform well despite the tough comparables from the previous year period. NewGen had a solid growth quarter as it maintains optionality for long-term upside through its PMTA submissions. We are also excited about our recent investment in Docklight Brands, which increases our exposure in the cannabis space and boosts our portfolio through the addition of the Marley™ CBD products line.”

GrowGen

GrowGeneration Corp . (NASDAQ: GRWG) has signed a lease in Jackson, Mississippi, for the future site of a state-of-the-art GrowGen garden center.  This will be the Company’s first location in the state of Mississippi, with 40,000 square feet of warehouse and showroom space, and will feature indoor vertical farming and controlled environment agriculture.  Importantly, the opening of GrowGen’s newest location will coincide with the implementation of Mississippi’s new medical cannabis program, approved by voters in November.

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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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