Columbia Care Inc. CCHW CCHW CCHWF 3LP reported its financial and operating results for the third quarter ended September 30, 2022.
About Q3 2022:
- Quarterly Revenue of $133 Million, an Increase of 2.4% QoQ
- Gross Profit of $52 Million, an Increase of 2.5% QoQ
- Adjusted Gross Margin1 of 43%, an increase of 33bps QoQ
- Adjusted EBITDA1 of $21 Million, an Increase of 74.5% QoQ, and Adjusted EBITDA Margin1 of 16%, an increase of 653bps QoQ
Top 5 Markets by Revenue in Q3 are California, Colorado, New Jersey, Ohio, and Virginia. And, the top 5 Markets by Adjusted EBITDA in Q3: are Colorado, New Jersey, Ohio, Pennsylvania, Virginia.
Nicholas Vita, CEO of Columbia Care, said their third-quarter results are “a testament to the embedded growth in our strategic footprint and the operational excellence we have developed over time.
“We achieved solid sequential topline growth and standout profitability improvements in another challenging quarter, with revenue increasing 2.4% sequentially to $133 million in the quarter. Adjusted EBITDA improved 74% over Q2 to $21 million, with sixteen of our seventeen markets generating positive EBITDA in the quarter,” Vita added.
Operational Highlights for Third Quarter 2022
- Retail revenue increased modestly, 0.4% over Q2 2022, while wholesale revenue increased 14% sequentially – a meaningful contributor to EBITDA
- New Jersey retail locations expanded to full adult use hours in June 2022, and market revenue increased more than 75% sequentially, with growth in wholesale of nearly five times the prior quarter, driven by the ramping scale in the new Vineland facility
- No additional retail locations opened in Q3. Subsequent to quarter end, opened Carytown, Virginia Cannabist location, the Company’s fifth retail location in Virginia, bringing total dispensaries to 85
- Additional dispensaries in development include 7 in Virginia, 1 in West Virginia, and 1 in New Jersey
- Sixteen of seventeen markets produced positive EBITDA in the third quarter
- In Q3, completed the first harvest out of the second cultivation facility in Vineland, New Jersey, which added approximately 270,000 square feet of cultivation and production capacity to the New Jersey footprint, as well as post-harvest automation equipment to support retail and wholesale growth
- Update on Cresco Transaction & Milestones Achieved: "Cleared federal Hart Scott Rodino antitrust review in May; Received overwhelming approval from our shareholders, with over 98% of the votes cast in July in favor of the transaction; Final order granted by the Supreme Court of British Columbia in July," according to the report.
Announced execution of agreement relating to first asset divestiture on November 4, with Illinois, Massachusetts, and New York assets being sold to Sean “Diddy” Combs, via Combs Enterprises; the remainder of the asset divestiture process is continuing to move forward with an additional announcement expected soon; and Closing of Cresco transaction anticipated to be around the end of the first quarter of 2023.
Outlook: Columbia Care expects sequential topline performance to be flat to low-single-digit growth in the fourth quarter. In addition, the Company expects an Adjusted EBITDA margin in the mid-to-high teens in the fourth quarter.
“At this time, Columbia Care’s 2022 outlook does not assume any additional changes in the regulatory environment in markets where Columbia Care currently operates. This also excludes potential future market changes where a conversion from medical only to adult use is under consideration by a governor and/or legislature,” according to the press release.
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