Cannabis Earnings Season Revs Into High Gear

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis stocks that generate industry sales of more than US$7.5 million per quarter (C$10.5 million). 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 to be considered for inclusion. Please note that we raised the minimum quarterly revenue in May 2019 from US$2.5 million and from US$5.0 million in October 2019.

46 companies currently qualify for inclusion, with 28 filing in U.S. dollars and 18 in the Canadian currency, which is up two from when we reported in early May. Cronos Group (TSX: CRON) , which reports in U.S. dollars, and Aleafia Health (TSX: ALEF) (OTC: ALEAF), which reports in Canadian dollars, joined the list. Several companies that had been expected to report by the end of April or mid-May have taken advantage of an extended deadline to accommodate delays due to the COVID-19 crisis, including five that report in U.S. dollars and three that file in Canadian dollars. We expect some additional delays as well.

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.

This was a big two-week period for some of the leading cannabis companies that report in U.S. dollars. There were updates from GW Pharma (NASDAQ: GWPH), Green Thumb Industries (CSE: GTII) (OTC: GTBIF), GrowGeneration (NASDAQ: GRWG), Tilray (NASDAQ: TLRY), Columbia Care (CSE: CCHW) (OTC: CCHWF), Charlotte’s Web (TSX: CWEB) (OTC: CWBHF), Innovative Industrial Properties (NYSE: IIPR), cbdMD (NYSE American: YCBD), Vireo Health (CSE: VREO) (OTC: VREOF), which was reporting its Q4 ending in December, Cronos Group and CV Sciences (OTC: CVSI).

GW Pharma retained its top spot among all companies, with revenue of $121 million ahead of expectations and tripling from a year ago. The company’s operating loss narrowed substantially as well. GTI moved to the top spot for MSOs, with revenue climbing 35% to $103 million, far exceeding the $92 million consensus, driven by strength in the Illinois and Pennsylvania markets. It also generated positive operating income.

Among ancillary companies, GrowGeneration exceeded expectations and raised its guidance after growing Q1 revenue 152% from a year ago to $33 million. REIT Innovative Industrial Properties met expectations, continuing its strong growth.

The two Canadian LPs that report in American dollars both saw sequential growth, with Tilray’s cannabis revenue, boosted by international sales, growing 8%, while Cronos Group expanded revenue by 12%. Both companies reported large operating losses.

Among the CBD companies, each experienced sequential declines in revenue, with Charlotte’s Web declining the least and exceeding expectations. CV Sciences, which also exceeded expectations but fell the least. cbdMD was the only one to report revenue below analyst expectations, and it saw an operating profit swing to a loss.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

Several companies will be reporting results for the March quarter during the remainder of May and have scheduled conference calls, including Trulieve (CSE: TRUL) (OTC: TCNNF), Curaleaf (CSE: CURA) (OTC: CURLF), MedMen Enterprises (CSE: MMEN) (OTC: MMNFF), Cresco Labs (CSE: CL) (OTC: CRLBF), Harvest Health & Recreation (CSE: HARV) (OTC: HRVSF), and AYR Strategies (CSE: AYR.A) (OTC: AYRSF).

Curaleaf, according to Sentieo, is expected to have generated revenue of $101 million during Q1, which would represent sequential growth of 34%. The quarter includes two months of revenue from its recently completed acquisition of Select. Note that the company reports the additional measure of “managed revenue”, which includes the total revenue generated by non-profits to which it provides managed services. Curaleaf is in the process of acquiring these entities, and their revenue will eventually be fully included in the reported revenue.

Trulieve, the leading MSO in terms of revenue through Q4, is expected to have generated revenue of $90.9 million during Q1, an increase of 14% from Q4 and of 104% above the same quarter a year ago. Harvest Health & Recreation is expected to have generated $43 million in revenue during Q1, an increase of 14% sequentially and 123% from a year ago.

Ayr Strategies is expected to have generated revenue during Q1 of $35.3 million, up 9% from Q4. The company’s operations in Massachusetts and Nevada were limited by regulatory changes imposed by COVID-19 late in the quarter. Analysts project that MedMen generated $48.8 million revenue during its fiscal Q3, which would be an increase of 11% over Q2 and 33% compared to the same quarter a year ago.

Cresco Labs, which is scheduled to report its Q1 on May 28th, is expected to have generated revenue of $67.1 million during Q1. The company suggested on its call in late April that revenue would be approximately $66.5 million. This represents growth of 62% over Q4 and 218% from the same quarter a year ago. Note that this is the first quarter to include a contribution from the Origin House acquisition that closed in early January.

For most of these companies, we publish comprehensive earnings previews for subscribers at 420 Investor.

Of the companies that report in Canadian dollars,  Aurora Cannabis (TSX: ACB) (NYSE: ACB), Sundial Growers (NASDAQ: SNDL), Zenabis (TSX: ZENA) (OTC: ZBISF) and Delta 9 Cannabis (TSX: DN) (OTC: VRNDF) reported in the first half of May. Aurora Cannabis surprised to the upside, with its C$75.5 million revenue in fiscal Q3 well ahead of the C$66.2 million consensus. The company also reduced its adjusted operating loss from its fiscal Q2. Aleafia’s initial entry into the rankings saw the company generate an operating profit in excess of C$5 million, and Delta 9, was also able to break even.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

During the remainder of May, no companies have yet scheduled conference calls, though Canopy Growth (TSX: WEED) (NYSE: CGC) has tentatively scheduled a late May call to discuss its fiscal Q4 results. The company, according to Sentieo, is expected to have generated revenue of C$129 million, which would be a record for the company and would represent 5% growth over Q3. The company is also expected to detail a large restructuring charge. TerrAscend (CSE: TER) (OTC: TRSSF)  hasn’t scheduled a call but is expected to report by June 1st. It guided to Q1 revenue of C$35 million when it reported its Q4 last month. Analysts currently project revenue to be C$34.75 million.

For both of these companies, we publish comprehensive earnings previews for subscribers at 420 Investor.

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 communities 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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