Schwazze Reports 94% YoY Revenue Growth, Seeks To Double Pro-Forma Revenue In 12 Months

Schwazze, previously known as Medicine Man Technologies Inc. SHWZ, posted Tuesday its fourth-quarter and full-year 2020 financial results, with full-year revenue of $24.0 million, up by 94% from $12.4 million in 2019.

Full-Year Highlights

• Product sales reached $22.5 million, compared to $7.8 million in the previous year.
• A net loss of $19.4 million or 47 cents per share, compares to a net loss of $17.0 million or 50 cents per share in 2019.
• Gross profit stood at $6.8 million, versus $4.8 million in the prior year.
• At the end of 2020, Schwazze had $1.2 million in cash and cash equivalents.

Fourth-Quarter Highlights

• For Q4 2020, the company posted total revenue of $7.9 million, up by 139% from $3.3 million in the same quarter of 2019.
• The net loss for the quarter was $8.5 million, or 21 cents per share, compared to a net loss of $3.4 million or 10 cents per share in the same period of 2019.
• The quarterly gross profit was $600,000, compared to $1.2 million in the corresponding period in the previous year.

2021 Guidance

The Denver, Colorado-based company offered financial guidance for the current year, which doesn’t include any unannounced acquisitions.

For 2021, Schwazze projects total revenue of around $105 to $125 million, and adjusted EBITDA, a non-GAAP measure, of around $28 to $36 million.

“Completing our Star Buds acquisition marks a significant leap forward for Schwazze that we believe positions us as the number one cannabis company by revenue in Colorado and one of the most profitable cannabis companies in the U.S.,” Justin Dye, Chairman and CEO, stated. “We are currently integrating the 13 Star Buds dispensary locations into our data-driven operating system to create operational and financial synergies and expect to complete the process by mid-June.”

Dye added the company has plans for more acquisitions “across cultivation, manufacturing, and retail that fit our criteria. New transactions will be announced upon completion of definitive agreements. Our view is that Colorado is a fundamentally attractive market that is poised for consolidation and our goal is to double Schwazze’s proforma revenue over the next twelve months through accretive acquisitions and internal growth.”

Recent Activities

At the beginning of March, Schwazze reported it has finalized the purchase of all 13 Star Buds dispensaries in Colorado, bringing the total number of its dispensaries in the Denver metro and southern Colorado region to 17. The company paid a total of roughly $118 million in stock and cash for the dispensary chain.

From December 2020 to March of this year, the company managed to raise a total of $72.76 million in financing, via a private placement offering of $57.76 million and a debt financing of $15 million.

At the time of writing, Scwazze’s shares were trading 2.25% higher at $2.27 per share.