Ancillary Cannabis Merger May Be Already Paying Dividends For Combined Company

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A merger of two of the biggest ancillary cannabis companies is reportedly paying dividends for Greenlane Holdings Inc. GNLN.  

Florida-based Greenlane services more than 8,500 retail locations, including licensed cannabis dispensaries, smoke shops and specialty retailers. It reported fourth quarter 2021 revenue of $56 million — a year-over-year increase of 54%. The company’s total revenue for 2021 increased 20.1% to $166.1 million, compared to $138.3 million in 2020.
Among the factors Greenlane attributed its positive financial results to is the reported $20 million annual cost savings resulting from its merger last year with KushCo Holdings Inc.

"2021 was one of the most pivotal years in Greenlane's 17-year history," Greenlane CEO Nick Kovacevich said. "Not only did we complete our transformational merger with KushCo — creating the industry's leading ancillary cannabis company and house of brands — but we also strengthened our Greenlane Brands portfolio with the acquisitions of Eyce and DaVinci, which gave us a strong platform entering the new year.”

Greenlane Brands sales increased 16.9% to $7.4 million, or 13.2% of total revenue, in the fourth quarter of 2021 compared to $6.3 million, or 17.5% of total revenue for the same period in 2020. Sales of Greenlane Brands increased 52.3% to $34.8 million, or 21% of total revenue, in 2021 compared to $22.8 million, or 16.5% of total revenue, in 2020.

The company also says it implemented a new 2022 strategic plan to accelerate its path to profitability by reducing headcount and its facility footprint, disposing of non-core assets, discontinuing distribution and selling of lower-margin third-party brands and securing an asset-based loan to support Greenlane’s working capital needs. 

Highlights of Greenlane’s financial report include: 

  • The appointment of corporate restructuring consultant and business leader Craig Snyder as chief commercial officer responsible for the company’s sales and go-to-market strategy
  • Approval from the U.S. Postal Service to ship B2B electronic nicotine delivery system products, making more than 97% of Greenlane’s shipments eligible for using major carriers or freight 
  • Acquiring vaporizer brand DaVinci and expanding the Greenlane Brands and intellectual property portfolio 

“This year has been off to a strong start, building on the progress we made last year, most notably through the introduction and implementation of our 2022 plan to streamline the organization, reduce our cost structure and capitalize the business in a non-dilutive manner,” Kovacevich said. “While the overall cannabis industry is facing headwinds in the form of inflation, supply chain disruptions and stock price declines, we are positioning ourselves to weather the storm, accelerate our path to profitability and ensure we have a stable and scalable business that can drive profitable growth in the long run.”

Net sales for Greenlane’s Consumer Goods segment totaled $24.9 million in the fourth quarter 2021, compared to approximately $32.7 million in the same period in 2020. For the full year, net sales for Greenlane’s Consumer Goods reporting segment decreased to $110.1 million, compared to $122.2 million in 2020. The company attributes the decrease to a reduction in sales of lower-margin third-party brands — part of the company's strategy to focus on its higher-margin proprietary Greenlane Brands. 

The Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations — through both Greenlane’s proprietary brands, including Eyce, DaVinci, VIBES, Marley Natural, Keith Haring and Higher Standards, as well as lifestyle products and accessories from leading brands, like PAX, Storz and Bickel and Grenco Science. 

Net sales in the fourth quarter 2021 for Greenlane’s Industrial Goods segment were $31.1 million compared to $3.6 million in the same period in 2020. For the full year, net sales for the company’s Industrial Goods segment increased to $56 million, compared to $16.1 million in 2020. The company says the August 2020 KushCo merger is the primary reason for the positive results.

For more information on Greenlane Holdings, visit 

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

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