Earnings Update: Vireo, Rubicon, Flower, Planet 13, Driven Deliveries, Decibel, Pure Harvest
Vireo Health Revenue Spikes, New Stores To Open By Q1 2021
The physician-led cannabis company generated revenue in seven states during the third quarter: New Mexico, Minnesota, Ohio, New York, Maryland, Pennsylvania and Arizona.
Its quarterly adjusted EBITDA was a loss of $675,808, which stands against a loss of $5.2 million in the same quarter of the prior year.
Net income hovered $122,252, compared to a net loss of $14.6 million in the corresponding period of 2019. Vireo attributes the boost to a gain of $16.4 million on the divestiture of the company’s PAMS subsidiary.
"Our third-quarter results demonstrate the improving nature of our business and success of recent initiatives to improve operating and financial performance," chairman and CEO Kyle Kingsley says. "For the past several quarters, we've been focused on positioning our vertically-integrated portfolio of assets to produce sustained and profitable growth, and we believe today's results are an encouraging indicator that we're nearing a critical inflection point in cash flow generation from operations."
Current development projects remain on time and budget, Kingsley added. Seven new dispensaries are expected to open before the end of the first quarter of 2021.
Rubicon Organics Discloses Revenue Growth
Rubicon Organics Inc. (TSXV:ROMJ) (OTCQX:ROMJF) saw a 219% spike in net revenue (CA$3.2 million) for the third quarter compared to the previous three-month period.
This was due to greater sales volume via direct sales to provincial suppliers and under the Agro-Greens Agreement.
Third-quarter adjusted EBITDA losses amounted to CA$2.6 million, compared to a loss of CA$2.5 million in the second quarter. It also saw a quarterly net loss of CA$4.3 million, standing against a net loss of CA$1.8 million in the prior quarter.
Among other moves and milestones:
- Rubicon's executing a letter of understanding with SQDC to sell its organic flower in Québec
- Starting to trade on TSX Venture Exchange
- Creating necessary deals to present some of its cannabis 2.0 products to the Canadian market
- Acceleration of warrant expiry date for 3.1 million warrant at an exercise price of CA$3.50 per share
Rubicon expects to reach positive adjusted EBITDA on a monthly basis by year-end 2020, and to attain monthly positive cash flow from operations in the first half of 2021. Other plans include the launch of extra brands covering the flower and extract categories and cannabis 2.0 products. What’s more, Rubicon projects to introduce its products to the international markets in the following year.
"Our journey is only going to get more exciting from here," Rubicon CEO Jesse McConnell said. "We have invested in world class personnel that will help bring new brands and products to market that will capture the desire of consumers to drive our growth in revenue and profitability.”
The Flowr Corporation Posts Q3 Net Loss
Net revenue reached CA$2.8 million — up by 110% from the corresponding quarter in the prior year.
The Toronto-based cannabis company also revealed a quarterly net loss of CA$10.17 million, compared to a loss of CA$14.69 million in the third quarter of 2019.
Adjusted EBITDA for the quarter was a loss of CA$3.48 million, standing against an adjusted EBITDA loss of CA$5.32 million.
The Flowr Corporation sold 552 kilograms of dried flower in the reporting period, which is about 144% higher than in the third quarter of 2019.
At the end of the quarter, the company amended the R&D agreement with Hawthorne, according to which Hawthorne will lend an additional CA$1.3 million to the Flowr.
After the quarter ended, the company announced the acquisition of Terrace Global Inc. (TSX.V: TRCE), a cannabis assets-focused multi-country operator. The acquisition transaction should close before the end of the year.
The Flowr projects to be cash flow positive in the first half of 2021.
“We continue to make inroads in proving out our business model in the Canadian recreational market,” stated Flowr CEO Vinay Tolia. “While competition is intensifying, we believe there is a clear consumer demand driven market for premium products in the Canadian marketplace."
The company's pending merger with Terrace Global is expected to put Rubicon in a stronger financial position to execute "strategic objectives" in 2021 and beyond, Tolia added.
Planet 13 Reports “Highest Quarter Of Sales Ever”
It adjusted EBITDA for the period was a gain of $6.2 million, standing against and adjusted EBITDA of $3.4 million in the third quarter of the prior year.
The Nevada-based cannabis company also reported quarterly net income of $200,000, compared to a net loss of $1.7 million in the same period of 2019.
Its gross profit before biological adjustments was $13 million or 56.9%, versus a gross profit of $9.9 million or 59.1% in the third quarter of 2019.
During the quarter, Planet 13 closed several successful bought deal public offerings, purchased 45,000 sq. ft. of indoor cultivation, and obtained a Nevada dispensary license.
"Our performance in the third quarter exceeded expectations — leading to our highest quarter of sales ever,” Planet 13 co-CEO Larry Scheffler. “Despite being impacted by the ongoing global pandemic and our Las Vegas SuperStore only at 50% capacity, we achieved 36% higher revenue compared to pre-COVID quarters."
Planet 13 will "undertake further strategic initiatives to grow revenue" as the Las Vegas economy recovers, Scheffler added.
Driven Deliveries Reports Record Third Quarter
Net Revenue for the same period was $6 million — a 393% year-over-year increase.
Gross revenue for the fiscal year totaled $16.6 million, — a 1,193% year-over-year boost.
Driven is set to be taken over by Stem Holdings Inc. (OTCQX:STMH)(CSE:STEM) some time in the fourth quarter. Once the deal wraps, the combined entity will do business as "Driven By Stem" and "continue to trade under the tickers STMH and STEM, according to Driven CFO and co-founder Brian Hayek.
"In CY21, the combined company is projected to generate revenue of $75 million and gross profit of $27 million by integrating Driven's delivery capability and proprietary technology in every state in which Stem currently operates and reducing costs in operations and SG&A," Hayek added. "As a result of the acquisition, the combined company is in a strengthened competitive position to build shareholder value."
Decibel Touts Net Revenue Increase of 29% From Previous Quarter
"We continue to execute as a producer of premium cannabis, with strong demand for our latest cultivars. The early success of our cannabis 2.0 product categories validates Decibel's approach to product innovation while maintaining our commitment to quality," he added.
Highlights from the third quarter include:
- Total net revenue growth of 29% over the second quarter to $7.6 million
- Net revenue growth of 163% over the comparative 2019 period
- Positive adjusted EBITDA for the first time
- The opening of two new Alberta retail stores in July
- Completion of a large scale, indoor cultivation facility — Thunderchild Cultivation — in July.
Pure Harvest Corporate Reports Strong Revenue Growth
- Q3 2020 revenues increased by 8,066% ($318,690) from Q2 2020 Revenue ($3,951)
- Gross profit went from being in the red back in Q2 2020 to the black, now hovering $258,138
- The company’s recently opened dispensary located in Dumont-Downieville, Colorado has experienced month-after-month growth — including a 15% increase in sales in the month of October.
“I’m elated to see such impressive growth and success in a short amount of time,” Pure Harvest CEO Matthew Gregarek stated. “Colorado is an exceptional, well-regulated marketplace. We were always confident that building a state-of-the-art dispensary between Denver and Colorado’s exceptional mountain resorts would be successful. Now our team has executed and our vision of success is becoming reality.”
Benzinga Editor Anthony Noto contributed to this report
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