NCV Raises the Requirements for Inclusion in the Public Cannabis Company Revenue & Income Tracker

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$15 million per quarter (C$18.8 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$12.5 million in August 2021, 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.

With the higher minimum revenue, 41 companies currently qualify for inclusion, with 34 filing in U.S. dollars and 7 in the Canadian currency, which is four less than when we reported a month ago. We added Organigram (TSX: OGI) (NASDAQ: OGI), which reports in  Canadian dollars. We have removed Aphria in the Canadian section due to the merger with Tilray, and we have also removed Nova Cannabis ((TSX: NOVC) (OTC: NVACF) since it no longer qualifies. Among the companies that report in American dollars, we have removed Flower One (CSE: FONE) (OTC: FLOOF), Goodness Growth (CSE: GDNS) (OTC: GDNSF) and Cronos Group (TSX: CRON) (NASDAQ: CRON), as their revenue in Q1 was below $15 million. 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 the company breaks out its financial performance. The closing of pending acquisitions will reduce the number of members in the months ahead, but we also expect additional companies to qualify.

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, Tilray (TSX: TLRY) (NASDAQ: TLRY), Turning Point Brands (NYSE: TPB) and KushCo Holdings (OTC: KSHB) were the only companies that report in American dollars to file financials. For Tilray, this was a transitional quarter, with three months of legacy Aphria but only one month of legacy Tilray included due to the timing of the close of the merger. The year-over-year growth was inflated by the inclusion of the legacy Tilray revenue as well as the SweetWater beer revenue. Because of the company’s lack of segment disclosure, we are unable to provide an adjusted operating income for its cannabis operations. Presumably, the vast majority of its GAAP operating loss of $73.7 million beyond the $33.3 million of transaction costs was related to its cannabis operations. We report the results of the Zig-Zag unit at Turning Point Brands, which saw 65% unit growth and gained 8% from pricing and mix shift compared to a year ago. KushCo’s Q3 results had been pre-announced at $27.5-28 million, and the company’s final results slightly exceeded its preliminary outlook.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

In the first two weeks of August, all of the largest companies in terms of revenue will be reporting, including Scotts Miracle-Gro (NYSE: SMG), Curaleaf (CSE: CURA) (OTC: CURLF), Green Thumb Industries (CSE: GTII) (OTC: GTBIF), Trulieve (CSE: TRUL) (OTC: TCNNF), Cresco Labs (CSE: CL) (OTC: CRLBF), Verano Holdings (CSE: VRNO) (OTC: VRNOF), Hydrofarm (NASDAQ: HYFM), GrowGeneration (NASDAQ: GRWG), Harvest Health & Recreation (CSE: HARV) (OTC: HRVSF) and Columbia Care (NEO: CCHW) (CSE: CCHWF) (OTC: CCHWF).

According to Sentieo, Scotts Miracle-Gro is expected to report overall revenue for its fiscal Q3 of $1.46 billion, down 2% from a year ago, with EPS declining 11% to $3.40. In early June, the company guided for its Hawthorne Gardening unit to grow sales in fiscal 2021 in excess of 40%. Curaleaf is expected to generate revenue of $309 million in Q2, up 163% from a year ago. Analysts project GTI revenue will increase 72% to $205 million. Trulieve could surpass GTI, as analysts forecast revenue will grow 72% to $208 million. Cresco Labs is expected to have reached revenue of $195 million, up 106% from a year ago.

This will be the first full quarter of revenue for the combined AltMed and Verano merger, which will boost revenue sequentially for the combined company, which has also added additional acquisitions. The company has suggested that revenue will approach $200 million for its Q2. According to Sentieo, Hydrofarm is expected to grow sales 45% to $$132 million in Q2. GrowGeneration, which has been highly acquisitive, is expected to have grown sales 157% to $112 million.  Analysts expect Harvest to have increased revenue by 74% in Q2 to $97 million. Columbia Care revenue is expected to have increased by 285% to $109 million.

In July, Organigram (TSX: OGI) (NASDAQ: OGI) reported its fiscal Q3, and Valens Company (TSX: VLNS) (OTC: VLNCF) reported its fiscal Q2. Organigram’s revenue exceeded the expectations of C$16.45 million, while Valens was slightly behind the analyst expectations of C$22 million.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

In the first part of August, Canopy Growth (TSX: WEED) (NASDAQ: CGC) will report its fiscal Q1. According to Sentieo, the company is expected to to see revenue increase just slightly to C$150 million, which would represent growth from a year ago of 36%. The adjusted EBITDA loss is expected to improve, but it is still forecast to be -C$65 million.

For those interested in more information about companies reporting in August, we publish comprehensive earnings previews for subscribers at 420 Investor, including for Focus List members mentioned here: Canopy Growth, Columbia Care, Cresco Labs, Curaleaf, Green Thumb Industries, GrowGeneration, Harvest Health & Recreation, Scotts Miracle-Gro 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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