Halo Collective Posts 63% YoY Revenue Growth In Q4, 345% Cannabis Sales Volume Growth

Halo Collective Inc. HALO HCANF (Germany: A9KN) announced its financial and operational results for the fourth quarter and full year ended December 31, 2021.

Q4 2021 Financial Highlights

  • Revenue of $8.4 million, up $3.2 million, or 63%, compared to $5.1 million in Q4 2020.
  • Total sales were 13 million grams (Q4 2020: 2.9 grams), a 345% increase.
  • Gross loss of $1.3 million, compared to a gross loss of $1.2 million in the prior year’s quarter.
  • Sales of nearly 13 million grams of cannabis products principally to dispensaries in Oregon and California, a 345% year-over-year increase compared to Q4 2020.
  • Adjusted gross margin was $0.8 million, or 9.6% gross margin, compared to $0.5 million, or 10.5% gross margin, in Q4 2020.
  • Adjusted EBITDA came in negative at $7.1 million compared to a loss of $3.7 million in Q4 2020.

Full-Year 2021 Financial Highlights

  • Revenue of $36.2 million, up $14.5 million, or 67%, compared to $21.6 million in 2020.
  • Sales of over 32 million grams of cannabis products principally to dispensaries in Oregon and California, a 381% year-over-year increase compared to 2020.
  • Gross profits were $4.5 million, representing 12.4% gross margin in 2021, compared to $4.3 million, or 19.7% gross margin, in 2020.
  • Adjusted gross profit1 was $7.3 million, or 20.1% gross margin, compared to gross profit of $5.2 million, or 24.0% gross margin, in 2020.
  • Adjusted EBITDA came in negative at $23.6 million compared to a loss of $6.9 million in 2020.
  • Operating expenses were $43.1 million in 2021 compared to $23.5 million in 2020.
  • Net loss was $93 million for 2021, or $10.48 per share, compared with a net loss of $41.2 million, or $7.27 per share, in 2020.
  • As of December 31, 2021, Halo had available cash in the amount of $1.7 million and approximately $0.1 million in restricted cash.

California Retail Rollout Update

Halo's "Seed to Sale" strategy in California accelerated as the Company delivered on its Los Angeles retail rollout in early 2022.

On March 18, 2022, Halo announced that the first Budega dispensary officially opened in the Arts District of North Hollywood, California.

Management anticipates opening stores in Westwood and Hollywood during in the spring and summer of 2022.

Incubation Strategy Outlook

In fiscal 2022, Halo is planning to execute a strategy of incubating promising companies within the cannabis industry and the broader wellness space.

Akanda Corp. is the most advanced in its execution but there are other initiatives at earlier stages underway with the Company's interests in software, California cultivation, and CBD and functional beverages, that collectively the Company expects will enhance its financial strength.

Management Commentary

“In 2020 we purchased two disparate international cannabis assets, Bophelo Bioscience & Wellness and CanMart and, after completing a reorganization of these assets and putting in place a team, strategy and structure, Halo is now the largest shareholder in this rapidly scaling international medical cannabis company with a stake worth over $100 million based on Akanda's current market capitalization,” said CEO Kiran Sidhu. “We are now assessing other opportunities with respect to Halo's investments in cannabis businesses ancillary to our West Coast operations, including our investments in CBD and functional beverages, two of the fastest-growing categories in the consumer space that can be widely distributed."

Photo: Couresy of Sharon McCutcheon on Unsplash

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