Cannabis Revenue Growth Remained Stalled in the September Reports

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis companies. September was a light month for reporting.

Tracker Rules

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$34.2 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$17.1million) in September 2021.

A Note About Adjusted Operating Income

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.

Tracker Inclusion Updates

At the time of our last update on August 28, 38 companies qualified for inclusion on the senior list, including 30 filing in U.S. dollars and 8 in the Canadian currency. Currently, 30 companies that file in U.S. dollars qualify and 8 that file in Canadian dollars are qualifying for the senior lists, a total of still 38. The junior list now includes 11 companies reporting in U.S. dollars and 6 in Canadian dollars. Since our last report, Humble & Fume (CSE: HMBL) (OTC: HUMBF) was removed due to the Canadian currency’s weakness that left it below the minimum. There were no other additions and deletions or category changes  during September. On a combined basis, the Public Cannabis Company Revenue & Income Tracker now includes 55 companies.

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.

Included Companies That Reported in September

Since our last update, there haven’t been many companies reporting. October will be light on reports as well.

Senior – American Dollar Reporting

The only update during September was MedMen (CSE: MMEN) (OTC: MMNFF), which reported a weak Q4 with revenue declining 6% sequentially and 12% from a year ago as the company generated an operating loss in excess of $103 million. In late August, after our last write-up, Jushi Holdings (CSE: JUSH) (OTC: JUSHF) reported a Q2 slightly ahead of expectations for revenue, which expanded 18% sequentially and 52% from a year ago.

In October, Tilray (TSX: TLRY) (NASDAQ: TLRY) will report its Q1 financials and host a call on the 7th. According to Sentieo, analysts expect the company to generate revenue of $156 million, up slightly from Q4 but down 7% from a year ago. Adjusted EBITDA is expected to increase slightly to $14 million. Readers should keep in mind that the company generates a majority of revenue from outside of the cannabis sector.

Junior – American Dollar Reporting

Only iPower (NASDAQ: IPW) reported in September. Its Q4 fell 3% sequentially in revenue to $22.1 million.

Senior – Canadian Dollar Reporting

There were three reports during September, including High Tide (TSXV: HITI) (NASDAQ: HITI), which reported its Q3, Aurora Cannabis (TSX: ACB) (NASDAQ: ACB), which reported its Q4, and Fire & Flower (TSX: FAF) (OTC: FFLWF), which reported its Q2. High Tide moved up in the ranks to #2. Aurora reported a quarter that was worse than had been expected. Fire & Flower’s quarter was a lot worse than expected and showed a large decline in its digital revenue.

In October, HEXO Corp,(TSX: HEXO) (NASDAQ: HEXO) is expected to report its Q4 ending in July. The company is expected to generate revenue of C$44 million, down slightly sequentially and up 14% from a year ago. Analysts project the company will report adjusted EBITDA of -C$12 million.

Junior – Canadian Dollar Reporting

There were no reports since our last update in this group.

Valens (TSX: VLNS) will report its Q3 ending on 8/31 in October. The company is expected to have generated revenue  of C$27 million, up 27% from a year ago. Adjusted EBITDA is expected to improve sequentially but decline from a year ago to C$11 million.

Stay up to date

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 created and continually update the Cannabis Investor Earnings Conference Call Calendar.

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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