The Largest American Cannabis Companies Delivered Robust Revenue Growth in Q2

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 required as of the end of August, 44 companies currently qualify for inclusion, with 36 filing in U.S. dollars and 8 in the Canadian currency, which is three more than when we reported two weeks ago. We added WM Technology (NASDAQ: MAPS) and Cronos Group (TSX: CRON) (NASDAQ: CRON) in the U.S. and Nova Cannabis (TSX: NOVC) (OTC: NVACF) in Canada following their recent earnings reports.  We expect to add additional companies in the months ahead, and, due to pending mergers, we anticipate some removals as well. Additionally, we are contemplating raising the minimum revenue again, depending upon the pace of additions and deletions.

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.

Since our last update, most of the largest cannabis operators in the U.S. reported, including 11 that exceeded quarterly revenue of $100 million. Excluding Jazz Pharma, which recently acquired the GW Pharma business and reported only a partial quarter, the average increase in revenue for these companies was 140% from a year ago. 9 of the 10 names reported positive operating income as well. In general, revenue and EBITDA met or exceeded analyst expectations. Scotts Miracle-Gro (NYSE: SMG) continued to see strong growth in its Hawthorne Gardening division in its fiscal Q3, which expanded 48% from a year ago and is up 60% year-to-date. Four MSOs each generated more than $200 million revenue during the quarter.  Curaleaf (CSE: CURA) (OTC: CURLF) exceeded the consensus estimate for revenue by 1%. Green Thumb Industries (CSE: GTII) (OTC: GTBIF) was 8% above expectations. Trulieve (CSE: TRUL) (OTC: TCNNF) was more than 3% above expectations, and Cresco Labs (CSE: CL) (OTC: CRLBF) beat the consensus by 8%.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

Several other companies will be reporting over the balance of August, including Ayr Wellness (CSE: AYR.A) (OTC: AYRWF), TerrAscend (CSE: TER)(OTC: TRSSF), TILT Holdings (NEO: TILT) (OTC: TLLTF), Jushi Holdings (CSE: JUSH) (OTC: JUSHF), The Parent Company (NEO: GRAM.U) (OTC: GRAMF) and Greenlane (NASDAQ: GNLN), all of which reported revenue in excess of $25 million in the prior quarter.

According to Sentieo, Ayr Wellness Q2 revenue is expected to reach $92 million, up 223% from a year ago, with adjusted EBITDA projected to reach $28 million. TerrAscend Q2 revenue is expected to increase 92% to $65.5 million. The company has provided 2021 guidance for revenue to exceed $300 million and adjusted EBITDA to exceed $128 million. TILT Holdings Q2 revenue is expected to have increased 24% to $48 million, with adjusted EBITDA of $7 million. Jushi Holdings pre-announced its Q2 revenue at $47.7 million, up 220%, with adjusted EBITDA of $4.6 million. Sentieo doesn’t provide the consensus for The Parent Company. Greenlane pre-announced Q2 revenue at $34.5 million, up modestly from a year ago.

In sharp contrast to the strength from American cannabis companies, Canopy Growth (TSX: WEED) (NASDAQ: CGC) fell short of expectations, with revenue of C$136 million growing just 23% from a year ago. Analysts had expected revenue to increase 36%. Despite the revenue short-fall, its adjusted EBITDA of -C$65 million was in line with expectations.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

No companies that report in Canadian dollars that are currently included in our ranking are reporting until September.

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: Greenlane, TerrAscend, The Parent Company and TILT Holdings.

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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