Cannabis Earnings Season Kicks Into High Gear

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis companies. This data-driven, fact-based tracker will continually update based on new financial filings so that readers can stay up to date. Companies must file with the SEC or SEDAR and be current to be considered for inclusion.

When we launched this resource in May 2019, companies with quarterly revenue in excess of US$2.5 million qualified. As the industry has scaled and as more companies have gone public, we have raised the minimum several times subsequently, including a move to US$5 million in October 2019, to US$7.5 million in June 2020, to US$10 million in November 2020 and US$12.5 million in August 2021.

Due to the rapid growth in the cannabis industry, we raised the minimum to US$25 million (C$32 million) to qualify for what we now call the senior list and introduced a junior list with a minimum of US$12.5 million (C$16.0 million) in September. At the time of our last update in late January, 36 companies qualified for inclusion on the senior list, including 30 filing in U.S. dollars and 6 in the Canadian currency. The junior list now includes 13 reporting in U.S. dollars and 4 in Canadian dollars. On a combined basis, the Public Cannabis Company Revenue & Income Tracker includes 53 companies. There were no additions or deletions this month. We expect to add additional companies in the months ahead, and, due to pending or recently completed mergers, we anticipate some removals as well. We note that Intercure (TASE: INCR) (NASDAQ: INCR), which reports in the Israeli currency, qualifies for the junior list, but we haven’t yet added it due to its different reporting currency.

In May 2019, we added an additional metric, “Adjusted Operating Income”, as we detailed in our newsletter. The calculation takes the reported operating income and adjusts it for any changes in the fair value of biological assets required under IFRS accounting. We believe that this adjustment improves comparability for the companies across IFRS and GAAP accounting. We note that often operating income can include one-time items like stock compensation, inventory write-downs or public listing expenses, and we recommend that readers understand how these non-cash items can impact quarterly financials. Many companies are moving from IFRS to U.S. GAAP accounting, which will reduce our need to make adjustments. Please note that our rankings include only actual reported revenue and not pro forma revenue. We also note that companies with non-cannabis operations must provide segment-level financial reports that detail not only revenue but also operating profit to be have their operating profit included in the tracker. Currently, Jazz Pharma (NASDAQ: JAZZ) and Tilray (TSX: TLRY) (NASDAQ: TLRY) aren’t providing this information.

Since our last update, several companies have reported, including some of the largest by revenue. Scott’s Miracle-Gro (NYSE: SMG) reported its fiscal Q1, with sales in its Hawthorne Gardening unit plunging 38% from a year ago. The company had pre-announced the short-fall. Innovative Industrial Properties (NYSE: IIPR) exceeded revenue expectations. WM Technology (NASDAQ: MAPS) surprised to the upside in its Q4 and provided a revenue outlook ahead of expectations for 2022. It expects overall revenue of $255-265 million, up 32-37% from 2021. Turning Point Brands (NYSE: TPB) reported 14% growth compared to a year ago in its Zig-Zags unit during Q4. The company expects the unit to deliver revenue of $193-203 million in 2022 compared to $103 million in 2021. MedMen (CSE: MMEN) (OTC: MMNFF) reported its fiscal Q2 very quietly, filing the 10-Q but failing to issue a press release. Revenue fell 2% sequentially and rose just 20% from a year ago as the company reported an operating loss in excess of $25 million.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

 

Over the first half of March, the largest companies scheduled to report include Curaleaf (CSE: CURA) (OTC: CURLF), Green Thumb Industries (CSE: GTII)(OTC: GTBIF), Jazz Pharma (NASDAQ: JAZZ), Columbia Care (CSE: CCHW) (NEO: CCHW) (OTC: CCHWF), Hydrofarm (NASDAQ: HYFM), GrowGeneration (NASDAQ: GRWG) and Ascend Wellness (CSE:AAWH.U) (OTC: AAWH). More than Q4 results, we believe that investors will be watching for 2022 guidance.

According to Sentieo, Curaleaf revenue is expected to increase 41% to $325 million, with adjusted EBITDA increasing 46% to $78 million. Green Thumb Industries (CSE: GTII)(OTC: GTBIF) is expected to have generated revenue of $238 million, up 34% from a year ago, with adjusted EBITDA of $82 million. Analysts expect Columbia Care revenue to increase 86% to $141 million with adjusted EBITDA of $32 million and Ascend wellness to report revenue of $89 million with adjusted EBITDA of $20 million.

Both GrowGeneration and Hydrofarm, which have done a significant amount of acquisitions, have pre-announced disappointing quarters. GrowGeneration revenue is expected to increase 44% to $89 million with an adjusted EBITDA loss of $2 million, and analysts anticipate Hydrofarm revenue grew 24% to $108 million with adjusted EBITDA of $8 million.

In February, Canopy Growth (TSX: WEED) (NASDAQ: CGC) and Aurora Cannabis (TSX: ACB) (NASDAQ: ACB) reported, both generally in line with expectations. Canopy Growth saw weakness in almost all of its segments in its fiscal Q3, but U.S. CBD and BioSteel helped offset it, with overall revenue declining 8% from a year ago. Aurora Cannabis experienced a 10% decline in revenue from a year ago during its fiscal Q2. Both companies saw substantial declines in adult-use sales in the Canadian market.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

In the first half of March, Valens (TSX: VLNS) (NASDAQ: VLNS) and Humble & Fume (CSE: HMBL) (OTC: HUMBF) are reporting from the junior list. According to Sentieo, Valens is expected to have generated C$20.6 million revenue in its fiscal Q4 ending in October, up 29%.

For those interested in more information about companies reporting in January, we publish comprehensive earnings previews for subscribers at 420 Investor, including for Focus List members mentioned here Ascend Wellness, Columbia Care, Curaleaf, Green Thumb Industries, GrowGeneration, and Valens.

Visit the Public Cannabis Company Revenue Tracker to track and explore the complete list of qualifying companies. We have recently created a way for our readers to access our library of Revenue Tracker articles. For our readers who are interested in staying on top of scheduled earnings calls in the sector, we have have created and continually update the Cannabis Investor Earnings Conference Call Calendar.

Get ahead of the crowd by signing up for 420 Investor, the largest & most comprehensive premium subscription service for cannabis traders and investors since 2013.

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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