June Earnings Reports Show Continued Divergence Between Canadian Cannabis Retailers and Producers

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.

45 companies currently qualify for inclusion, with 37 filing in U.S. dollars and 8 in the Canadian currency, which is one more than when we reported a month ago. We added Flower One (CSE: FONE) (OTC: FLOOF), which reports in American dollars. Also, we have left Aphria in the Canadian section for now, but we will remove it when Tilray (NASDAQ: TLRY) reports its Q4. Additionally, we have left GW Pharma in the American dollar reporting section and will remove it or replace it with its acquirer, Jazz Pharmaceutical (NASDAQ: JAZZ), depending upon how they break out its financial performance.

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.

Only Flower One reported during June, catching up on its delayed filings as it reported a revenue gain of 53% for Q1 compared to a year ago.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

In July, KushCo Holdings (OTC: KSHB) will report its fiscal Q3 financials. The company pre-announced revenue at $27.5-28 million. According to Sentieo, analysts expect the company to report revenue of $27.86 million, with adjusted EBITDA of -$1.04 million. We expect that Tilray (TSX: TLRY) (NASDAQ: TLRY) could report its fiscal Q4 as well during July, though the deadline isn’t until August. This quarter will include a full quarter of legacy Aphria results with only a portion (28 days) of the legacy Tilray financials due to the timing of the close of the merger. Analysts expect revenue of $141 million, with adjusted EBITDA of $6 million. Note that the revenue includes a significant contribution from non-cannabis businesses.

Since we last provided an update, retailers Fire & Flower (TSX: FAF) (OTC: FFLWF) and High Tide (TSXV: HITI) (NASDAQ: HITI) reported strong growth, while LP HEXO Corp (TSX: HEXO) (NYSE: HEXO) missed estimates by a substantial margin. Fire & Flower and High Tide are both on the heels of Aurora Cannabis (TSX: ACB) (NASDAQ: ACB) for the #2 spot among those companies reporting in Canadian dollars. Both companies nearly doubled their revenue while generating relatively modest operating losses. HEXO Corp, on the other hand, saw revenue grow only 2% compared to a year ago as it slipped out of the Canadian Cannabis LP Tier 1 Index.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

During July, Organigram (TSX: OGI) (NASDAQ: OGI) will report its fiscal Q3, and Valens Company (TSX: VLNS) (OTC: VLNCF) will report its fiscal Q2. Organigram is expected to see revenue increase only modestly from fiscal Q2, with the projected C$16.45 million representing a decline of 9% from a year ago. Analysts forecast adjusted EBITDA to have been -C$6.02 million. Valens is expected to have generated C$22 million in revenue, up 10% sequentially and 25% from a year ago, with adjusted EBITDA of -C$2.3 million.

For those interested in more information about companies reporting in June, we publish comprehensive earnings previews for subscribers at 420 Investor, including for Focus List members KushCo Holdings, Organigram and Tilray.

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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