Verano Posts Solid Second Quarter Revenue, Raises Guidance

Despite a net loss of $13 million for the quarter, the company's CEO remains confident.

Chicago-based MSO Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) showed some signs of more resilience in its latest financials, posting a record quarterly revenue of $234 million for the second quarter ending June 30.

The figure represents a 5% growth from the same period last year and a 3% hike sequentially. The rise is attributed largely to robust retail and wholesale adult-use sales in New Jersey and Connecticut, despite slight dips in Pennsylvania and Arizona.

“Our strong second quarter results demonstrate the effectiveness of the strategy we’ve executed since inception,” CEO and founder George Archos said in a statement. He pointed to the company’s ability to generate record revenues while strengthening its financials.

“Despite ongoing fluctuations in the industry, we remain well-positioned to pursue potential growth opportunities,” Archos added.

Gross profits for the second period stood at $115 million, constituting 49% of revenue, a notable increase from $98 million, or 44% from the second quarter of 2022. The positive trajectory was buoyed by more sales of Verano products and a reduction in cultivation expenses.

While the company posted a net loss of $13 million for the quarter, Archos remains confident. It was also a jump from last year’s net loss of $9.2 million.

“Since inception, we’ve built a sustainable business that has never depended on federal reform, and I remain confident in our ability to continue thriving in the current environment,” he said. He highlighted the company’s expanding geographical footprint and raised free cash flow guidance for 2023.

Adjusted EBITDA for the second quarter came in at $72 million or 31% of revenue. Cash flow from operations for the first half of 2023 was reported at $41 million, even though it experienced a slight drop from $44 million in the prior year.

Looking forward, Verano has tightened its free cash flow forecast for 2023, projecting a range of $65-75 million, an optimistic increase from their prior estimate of $50-75 million.

Operational strides include the inauguration of several new retail outlets across states and the introduction of “On the Rocks”, a brand pivoting around solventless extraction methods. The company also marked the commencement of adult-use sales in Maryland on July 1, which should beef up the balance sheet for the next reporting period.

The cannabis firm’s foothold spans 13 states, with a network of 132 dispensaries and 14 cultivation and processing units. As of June 30, Verano’s assets totaled $319 million, with $103 million cash in hand.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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