Verano Q1 Revenue Declines 4% Sequentially to $202.2 Million

CHICAGO, May 25, 2022 (GLOBE NEWSWIRE) — Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) (“Verano” or the “Company”), a leading multi-state cannabis company, today announced its financial results for the first quarter ended March 31, 2022 (“Q1 2022″), which were prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).

Q1 2022 U.S. GAAP Financial Highlights

  • Q1 2022 revenue increased 67% to $202 million compared to the first quarter 2021.
  • Q1 2022 gross profit was $100 million or 49% of revenue, compared to $54 million in the first quarter 2021; excluding an M&A inventory step up and depreciation and amortization, gross margin was 61%, up 1% from Q4 2021 on a comparable basis.
  • Q1 2022 SG&A was $80 million or 40% of revenue, compared to $37 million or 30% of revenue in the first quarter 2021; excluding depreciation, amortization and M&A earnouts, SG&A was 27% of revenue, up 2% from Q4 2021 on a comparable basis.
  • Net loss in the first quarter 2022 was $7 million, compared to a loss of $2 million in the first quarter 2021.
  • Q1 2022 EBITDA on an unadjusted basis was $81 million or 40% of revenue, and Adjusted EBITDA1 was $81 million or 40% of revenue.
  • Cash flow from operations for the first quarter 2022 was $53 million, and free cash flow2 was $6 million.

2022 First Quarter Operational Highlights

  • On January 31, 2022, entered into an arrangement agreement to acquire Goodness Growth Holdings, Inc. (“Goodness Growth”) to establish a strong foundation in the attractive markets of New York, Minnesota and New Mexico.
  • Drew an additional $100 million under the Company’s senior secured credit agreement, with an added option to request funding of up to $175 million.
  • Bolstered the Company’s retail footprint, including the opening of two new Florida MÜV dispensaries in the Tampa area; and the Company’s first West Virginia Zen Leaf cannabis dispensary in Morgantown.

Subsequent Operational Highlights

  • Welcomed New Jersey Governor Phil Murphy at Zen Leaf Elizabeth to celebrate the commencement of adult-use sales in the state on April 21, 2022.
  • Commenced adult-use sales at the Company’s Zen Leaf Lawrence Township location, also on April 21, 2022, with adult-use sales at Verano’s Zen Leaf Neptune Township location expected to begin in summer 2022.
  • Completed the conversion from International Financial Reporting Standards (“IFRS”) to U.S. GAAP.
  • Filed Registration Statement on Form 10 on April 26, 2022, with the U.S. Securities and Exchange Commission (“SEC”).
  • Further expanded the Company’s retail footprint with the opening of four new Florida MÜV dispensaries in Marco Island, Hobe Sound, Fort Myers Beach, and Ocala.
  • Relocated a Zen Leaf dispensary to an enhanced retail corridor location in Canton, Ohio.
  • Launched mobile applications and exclusive rewards programs for Verano’s flagship Zen Leaf and MÜV dispensaries.
  • Achieved active operations spanning 13 states, consisting of 98 dispensaries and 13 cultivation and processing facilities, with more than one million square feet of cultivation capacity.

Management Commentary

I am proud of the financial and operational performance we achieved this quarter, including sustaining our signature industry-leading margins, despite facing substantial headwinds that have affected our industry and the broader economy.

George Archos, Verano Founder and Chief Executive Officer

We remain focused on execution, evidenced by our continued retail footprint expansion, where we added seven locations in the first quarter, including our first Zen Leaf dispensary in West Virginia.

“Further, the April launch of adult-use sales in New Jersey generated significant and immediate growth in the state, which is representative of similar opportunities we are poised to capitalize on in future transitioning markets in our portfolio. This summer, we are excited to add Zen Leaf Neptune as an additional adult-use dispensary in a prime Jersey Shore location, and throughout the course of 2022, we will continue to invest back in our business through a number of cultivation construction and expansion projects. Overall, we are pleased by our progress in strategically positioning Verano to capitalize on anticipated growth in the second half of the year and beyond,” added Mr. Archos.

Balance Sheet and Liquidity

As of March 31, 2022, the Company’s current assets were $340 million, including cash and cash equivalents of $140 million. The Company had working capital of ($111) million and total debt, not including lease liabilities and net of issuance costs, of $384 million.

The Company’s total Class A subordinate voting shares outstanding, including Class B proportionate voting shares on an as-converted basis, was 327,868,399 as of March 31, 2022.

Non-GAAP Financial Measures

Verano uses non-GAAP financial information to evaluate the performance of the Company. The terms “EBITDA”, “Adjusted EBITDA” and “Free Cash Flow” do not have any standardized meaning prescribed within GAAP and therefore may not be comparable to similar measures presented by other companies. Accordingly, this non-GAAP financial information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.

The Company calculates EBITDA as net earnings from operations before interest expense, tax expense, depreciation, and amortization and Adjusted EBITDA as EBITDA as adjusted for one-time expenses related to other expenses, gain from investment in associates and acquisition related costs. Free Cash Flow is calculated by the Company as cash flow from operations minus capital expenditures. The calculations of the non-GAAP financial information used in this news release and the reconciliations to the most comparable U.S. GAAP financial numbers are included in the tables below.

Management believes that this non-GAAP financial information is useful as a supplement to comparable U.S. GAAP financial information. Management reviews these non-GAAP financial measures on a regular basis and uses them, together with financial measures included in the Company’s financial statements, to evaluate and manage the performance of the Company’s operations. These measures should be evaluated only in conjunction with the comparable U.S. GAAP financial measures reported by the Company.

Conference Call and Webcast

A conference call and audio webcast with analysts and investors will be held on May 25, 2022, at 8:30 a.m. ET / 7:30 a.m. CT to discuss the results and answer investor and participant questions.

About Verano

Verano is a leading, vertically integrated, multi-state cannabis operator in the U.S., devoted to the ongoing improvement of communal wellness by providing responsible access to regulated cannabis products. With a mission to address vital health and wellness needs, Verano produces a comprehensive suite of premium, innovative cannabis products sold under its trusted portfolio of consumer brands, including Verano™, Avexia™, Encore™, and MÜV™. Verano’s portfolio encompasses 15 U.S. states, with active operations in 13, including 13 cultivation and processing facilities comprising over 1,000,000 square feet of cultivation capacity. Verano designs, builds, and operates dispensaries under retail brands including Zen Leaf™ and MÜV™, delivering a superior cannabis shopping experience in both medical and adult-use markets. Learn more at

Financial Information Tables

The following tables set forth financial information derived from the first quarter 2022 consolidated financial statements of the Company prepared in accordance with U.S. GAAP and audited in accordance with U.S. PCAOB, which consolidated financial statements are included in the U.S. Registration Statement filed with the SEC and available at (Collectively, the “U.S. Financial Statements”).

The foregoing reconciliations of the non-GAAP financial measures are being made to the most comparable U.S. GAAP financial numbers (i) for the three months ended March 31, 2022, as presented in the Company’s unaudited consolidated financial statements of the Company contained in the above tables in this news release, and (ii) as presented in the U.S. Financial Statements.


1 Adjusted EBITDA is a non-GAAP financial measure. It is derived from EBITDA, another non-GAAP financial measure, both of which are defined in this news release in the section below titled “Non-GAAP Financial Measures.” The most comparable U.S. GAAP financial measure to Adjusted EBITDA and EBITDA is net income. The reconciliations of Adjusted EBITDA and EBITDA to U.S. GAAP net income is set forth below in the tables included in this news release.
2 Free Cashflow is a non-GAAP financial measure and is defined in this news release in the section below titled “Non-GAAP Financial Measures.” The most comparable U.S. GAAP financial measure is cash flow from operations. The reconciliations of Free Cash Flow to U.S. GAAP cash flow from operations is set forth below in the tables included in this news release.

Original press release

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