Chalice Brands Shares Crash On Record Q1 Revenues Of $5.5M, Positive Adjusted EBITDA, Higher Net Loss

Chalice Brands, previously operating under the name Golden Leaf Holdings Ltd. CHAL GLDFF on Monday released its first-quarter earnings with record revenue of $5.5 million, up by 18% year-over-year.

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Financial Highlights

• The company’s revenue from continuing operations in the first quarter amounted to $5.5 million, which compares to $4.7 million in the first quarter of 2020; Chalice noted that the higher revenue could be attributed to the company’s development of retail and wholesale operations in Oregon;
• Its gross profit for the period was $2.5 million, or 45% gross margin, compared to $1.7 million or 37% gross margin in the prior year; Higher margins are a result of better sales of vertical products produced by the company;
• Net loss was around $4.32 million, which compares to a net loss of $2.44 million in the same period of 2020;
• The company achieved a positive adjusted EBITDA of around 7% or $370,000, compared to an adjusted EBITDA loss of $700,000 in the corresponding quarter of the previous year.

Recent Business Milestones

The Portland, Oregon-based cannabis company disclosed several achievements from the first quarter, including:

• Letter of intent for purchase of Homegrown Oregon, a chain of five retail stores in Oregon; The acquisition of Homegrown should boost the company’s annual revenue by around $11 million, also contributing with more than $2 million in adjusted EBITDA;
• Improvement of its balance sheet via restructuring of its convertible debentures;
• Raising gross proceeds of $10.5 million through two private placement offerings with the goal of supporting its expansion across Oregon;
• Further advancing efficiency of the Bald Peak grow facility, and achieving a monthly output of 250lbs of finished flower and biomass;

Shortly after the quarter ended, Chalice confirmed 80% purchase of the CBD skincare brand Fifth & Root, which is available across 400 retail stores in the U.S.

 “Continued profitable operations and accretive acquisitions should set us up for a record-breaking second half of 2021,” Jeff Yapp, CEO of Chalice Brands, said. “We continue to look forward to favorable federal regulation changes while we grow Fifth & Root to showcase our brand portfolio nationally. Our team is energized and focused on growth as we remain disciplined in our allocation of capital.”

Price Action

Chalice’ shares were trading 95.26% lower at $0.05 per share at the time of writing.

Image Credit: Matca Films