Here Is What to Expect as the Largest Cannabis Companies Get Ready to Report Financials

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$12.5 million per quarter (C$15.5 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 and be current to be considered for inclusion. Please note that we have raised the minimum quarterly revenue several times as the industry has scaled up, including from US$10.0 million in November 2020, US$7.5 million in June 2020, US$5.0 million in October 2019 and US$2.5 million in May 2019.

41 companies currently qualify for inclusion, with 29 filing in U.S. dollars and 12 in the Canadian currency, which is the same as when we provided an update earlier this month. Auxly (TSX: XLY) (OTC: CBWTF) was added, while Organigram (TSX: OGI) (NASDAQ: OGI) was removed due to its revenue slipping below the minimum.

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 included in the tracker.

Since our last update, several companies that report in American dollars provided quarterly financials, including TILT Holdings (CSE: TILT) (OTC: TLLTF), Planet 13 Holdings (CSE: PLTH) (OTC: PLNHF), 4Front Holdings (CSE: FFNT) (OTC: FFNTF) and Harborside (CSE: HBOR) (OTC: HBORF), which reported their fiscal year-ends, and KushCo Holdings (OTC: KSHB), which reported its fiscal Q2 ending 2/28. TILT Holdings slightly exceeded the consensus forecast for revenue. Planet 13’s quarter was substantially lower than analysts had forecast, but it shared promising trends in its business during March.  KushCo Holdings reported revenue in line with analysts expectations.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

Get ready for a deluge of reports from some of the largest companies in the first part of May. With a larger universe of companies and with most of them now conforming to the SEC filing deadline, which is shorter than in Canada, it’s going to be quite busy the second week of May. Among the companies generating the highest levels of revenue that are expected to report in the first half of May are Scotts Miracle-Gro (NYSE: SMG), Curaleaf Holdings (CSE: CURA) (OTC: CURLF), Green Thumb Industries (CSE: GTII) (OTC: GTBIF), Trulieve (CSE: TRUL) (OTC: TCNNF), Cresco Labs (CSE: CL) (OTC: CRLBF), Hydrofarm (NASDAQ: HYFM) and Columbia Care (CSE: CCHW) (NEO: CCHW) (OTC: CCHWF).

According to Sentieo, Scotts’s Miracle-Gro overall Q2 revenue, the majority of which is its lawn and garden business, is expected to grow 25% to $1.7 billion, with EPS of $5.42 in the company’s peak quarter of the year seasonally. In its recent analyst day, the company suggested that its Hawthorne business would grow near the high-end of its previously suggested 20-30% growth rate for its fiscal year ending in September.

Curaleaf’s Q1 revenue is expected to increase 162% from a year ago to $253 million, up 10% sequentially. GTI revenue is expected to increase 82% from a year ago, up 5% sequentially, to $186 million. Trulieve revenue is expected to increase 96% from a year ago, up 12% sequentially, to $188 million.

Cresco Labs revenue is expected to grow 155% to $169 million, up 4% sequentially. Hydrofarm pre-announced its Q1 revenue at $109-111 million, up 65% from a year ago. Columbia Care revenue is expected to increase 261% to $95 million, up 25% sequentially.

In April, three leading Canadian LPs, including Aphria (TSX: APHA) (NASDAQ: APHA), Auxly and Valens Company (TSX: VLNS) (OTC: VLNCF) reported as well as retailer Fire & Flower (TSX: FAF) (OTC: FFLWF). Aphria’s decline in its Q3 revenue was a surprise and due to weakness in its adult-use sales. Valens began its fiscal year with a big increase off of its Q4 results. Auxly attributed its strong Q4 growth to its success in its non-flower products, which represented 80% of revenue. Fire & Flower exceeded analyst expectations for both revenue, at C$43.2 million, as well as adjusted EBITDA, which was C$1.5 million as it ended its fiscal year.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

During May, Aurora Cannabis (TSX: ACB) (NYSE: ACB) and TerrAscend (CSE: TER) (OTC: TRSSF) are among the larger companies that will be reporting financials. According to Sentieo, Aurora Cannabis revenue in its fiscal Q3 is expected to increase 5% sequentially to C$71.3 million, which would represent a decline of about 5% from a year ago. TerrAscend, which will be changing its reporting from Canadian to American dollars in its Q1 report to reflect that the vast majority of its revenue is derived from its MSO operations, is expected to report revenue of US$65.3 million with an adjusted EBITDA of US$25.6 million.

For those interested in more information about companies reporting in May, we publish comprehensive earnings previews for subscribers at 420 Investor, including for Focus List members Aurora Cannabis, Columbia Care, Cresco Labs, Curaleaf, Green Thumb Industries, Scotts Miracle-Gro, TerrAscend and Trulieve.

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.

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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