You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.
Friends,
This week we’ve seen a lot more quarterly earnings releases which we detail below. For readers who are looking for an up-to-date snapshot of how each company currently stacks up, please see our managed Public Cannabis Company Revenue & Income Tracker.
Exclusive Interviews
This week, we spoke with Yoko Miyashita, CEO of Leafly, about the company’s decision to go public and her long-term vision to build a lasting company through consumer engagement. She tells NCV the company is looking to revamp its brand subscription products and drive more engagement.
We also spoke with Chris Beals, CEO of WM Technology, who is the owner of Weedmaps. Since last we talked, the company has executed a number of acquisitions. The company also has successfully attracted new talent. Better yet, Beals says the company continues to be profitable and debt-free.
Cannabis Growth
Several cannabis companies reported that they have been executing their growth plans as of last week. Jushi announced it was expanding its product offerings with the launch of its first line of solventless live rosin extracts by its brand The Lab™. The company also said it is expected to launch at locations in Massachusetts, Nevada and Virginia, pending regulatory approval. As cannabis markets mature and more states come online, Jushi expects the demand for extracted products to accelerate.
Another company expanding its offerings is TerrAscend Corp. The cannabis operator announced the first-ever launch of cannabis concentrates in New Jersey – Kind Tree Liquid Live Resin Vape Cartridges and Kind Tree Live Resin Crumble. Noting that the concentrate category accounts for up to 20% in cannabis sales in other states, TerrAscend’s Executive Chairman Jason Wild said the company will be expanding the category with the planned launch of additional Kind Tree concentrates in coming weeks.
Canopy Growth purchased the right to acquire California-based Jetty Extracts for $69 million. The deal is structured as two separate option agreements whereby Canopy Growth has a call option to acquire up to 100% of the equity interests in Jetty. The company said that it’s building a house of premium cannabis brands with a focus on the core growth categories that will power the market’s path forward, now including Jetty – a pioneer of solventless vapes.
After the opening of the Body and Mind Michigan dispensary in February and the completed rebranding of their San Diego dispensary, the company has also opened their Ohio production facility and has expanded its product offerings in the state. Body and Mind has continued its growth strategy thanks to a lean and disciplined business model which allows for positive cash flow from its operations.
Get up to speed by visiting the Body and Mind Investor Dashboard that we maintain on their behalf as a client of New Cannabis Ventures. Click the blue Follow Company button in order to stay up to date with their progress.
Earnings Recap
Auxly Q1 revenue fell 23% sequentially to C$22.6 million, but grew 147% from C$9.1 million in the same quarter a year ago “amid intense and growing competition and seasonal buying trends in the Canadian cannabis market,” according to CEO Hugo Alves.
Charlotte’s Web Q1 revenue fell 22% sequentially and 17% from a year ago to $19.4 million. The company blamed part of the decrease on its need to temporarily close its production and shipping terminal in January after a local wildfire in Colorado as well as a $3.0 million decline in e-commerce revenue from the previous year. CEO Jacques Tortoroli said the company’s key priority is rebuilding traffic and conversions in e-commerce, their largest revenue channel. He also added that “subscriptions more than doubled since Q1 2021.”
Columbia Care Inc. Q1 revenue decreased 12% sequentially to $123.1 million, while year-over-year it rose 43% from $86.1 million. Company CEO Nicholas Vita said the results of the first quarter demonstrate how Columbia Care was able to overcome some strong macro-economic headwinds.
Cresco Labs Q1 revenue slipped 2% sequentially to $214.4 million, but was up 20% year-over-year from $178.4 million. Co-Founder and CEO Charles Bachtell said the company remains focused on the long game. He also pointed to the planned deal with Columbia Care. He added, “We recently crossed our first milestone by passing the federal HSR review process on May 16 and we do not expect state regulatory approvals to be an issue for our closing timeline.”
Greenlane Q1 revenue fell 17% sequentially to $46.5 million, however revenue was up 37% compared to $34 million for Q1 a year ago. CEO Nick Kovacevich said the year-over-year revenue increase was driven primarily by the KushCo merger in September 2021. He noted that the company has been taking “steps to enhance the topline and further reduce our cost structure.” He also added, “we are on track to achieve our previously communicated goal of positive adjusted EBITDA by the third quarter of 2022.”
InterCure saw its Q1 revenue increase 9% sequentially to C$34 million. The company also reported record quarterly revenue of almost three times greater than Q1 2021. InterCure’s Chief Financial Officer Amos Cohen said, “Evolving regulations in our key markets, continued consolidation process and duplicating our unique seed-to-sale operation to more territories sets 2022 to be another milestone year for InterCure.”
iPower Q3 revenue surged 33% sequentially to $22.8 million, up 74% year-over-year. The company experienced significant growth, according to CEO Lawrence Tan. He attributed the growth to the launch of business in Europe, as well the launch of two new joint ventures targeting the eCommerce, logistics and social media markets. “In addition, we closed our first ever M&A transaction by acquiring our largest global co-engineering partner, serving to expand our production capacity and deepen our R&D capabilities,” Tan said.
Planet 13 Q1 revenue dropped 14% sequentially to $25.7 million, but was up 8% from $23.8 million in the same quarter last year. The company’s Co-CEO said its branded products are performing well with wholesale continuing to grow nicely in Nevada. In March, Planet 13 closed on its acquisition of Next Green Wave. The company also continues to grow its Florida operations working to bring cultivation and retail online in the Sunshine State.
The Parent Company revenue for Q1 fell 16% sequentially to $33.2 million and was down 17% from $39.9 million year-over-year. CEO and Chairman Troy Datcher acknowledged the need to reduce costs, drive efficiencies and accelerate its path to sustainable, long-term profitability. “We are building this business for the long-haul and the steps we are taking now will help to preserve our strong balance sheet and grow our omnichannel retail business,” Datcher said.
TILT Holdings Q1 revenue declined 22% sequentially and 9% year-over-year to $42.4 million due to inflationary pressure on consumers as well as regulatory timing delays. At the same time, CEO Gary Santo noted that their inhalation business experienced the second strongest sales order month in its history in April. TILT also announced two sale leaseback transactions totaling $55 million which will be used to pay down outstanding debt by up to 50%.
Schwazze was one of a handful of companies reporting a Q1 revenue jump of 20% sequentially and 64% year-over-year to $31.8 million. Since December 2021, Schwazze closed acquisitions adding 14 cannabis dispensaries, 10 in New Mexico and four in Colorado, as well as four cultivation facilities in New Mexico and one in Colorado and one manufacturing asset in New Mexico.
Sundial Growers Q1 revenue slid 23% to C$17.6 million, while it increased 78% from a year ago. In March, Sundial acquired Alcanna Inc. CEO Zach George said the deal makes Sundial Canada’s largest private sector distributor of both liquor and cannabis, with 354 retail locations, “and we have quickly benefitted from collaboration with our new legacy Alcanna colleagues.”
Unrivaled Brands Q1 revenue decreased 9% sequentially to $20.7 million, but was up from $2 million in the same quarter a year ago. CEO Tiffany Davis said the company’s immediate focus is to protect the company’s performing assets and “to firmly plant us on the path to profitability, beginning with the development and execution of a 100-day transformational plan.
For the upcoming week, be sure to stay up to date with our Cannabis Investor Earnings Conference Call Calendar as there are many companies up next such as Jushi Holdings, Ayr Wellness, SLANG, Verano and Canopy Growth.
To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.
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View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.
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Sincerely,
Alan & Joel
info@newcannabisventures.com
