AFC Gamma Q1 2024 Reports Sharp YoY Net Income Drop Amid $90M Loan Expansion

Zinger Key Points
  • AFC Gamma faces a shift from a $10M profit to a $0.1M net loss year-over-year.
  • The company originated $90.4M in loans, with strategic $34M investment in Sunburn Cannabis.
  • CEO Daniel Neville highlights positive legislative trends and strategic focus on limited license states.

AFC Gamma Inc. AFCG, a cannabis-focused commercial real estate finance company, announced its results Thursday for the first quarter ended March 31, 2024. 

Comparing year-over-year, AFC Gamma’s net income dropped from $10.0 million in Q1 2023 to a loss of $0.1 million in Q1 2024. Distributable earnings also saw a decrease from $11.6 million to $10.0 million, reflecting a 14% decline. The dividend per share was reduced from $0.56 in Q1 2023 to $0.48 in Q1 2024.

Q1 2024 Financial Highlights

  • GAAP Net Loss: AFC Gamma reported a minor net loss of $0.1 million, or $0.01 per basic weighted average common share.
  • Distributable Earnings: The company achieved distributable earnings of $10.0 million, or $0.49 per basic weighted average common share.
  • Loan Originations: AFC Gamma originated a total of $90.4 million in loans during the quarter, including $34 million to cannabis operators and $56.4 million to commercial real estate developers.
  • Dividends Paid: The company distributed dividends totaling $9.9 million, equating to $0.48 per common share for the first quarter of 2024.

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CEO Commentary

"We are pleased to have originated a total of $90.4 million of loans in the first quarter of 2024, with $34 million in loans to cannabis operators and $56.4 million to commercial real estate developers. On the cannabis side, we completed a $34.0 million debt investment in Sunburn Cannabis, a private, vertically integrated single-state Florida operator," Daniel Neville, AFC Gamma CEO said.

"The investment underscores our commitment to fostering long-lasting relationships with our borrowers and focusing on limited license states with attractive supply and demand dynamics. Additionally, we are encouraged by the promising legislative developments at both the federal and state level, including the anticipated rescheduling at the federal level and the potential transition to adult-use cannabis in states like Ohio and Florida."

AFCG Price Action
AFCG's shares were trading 1.21% lower at $12.25 per share at the time of this writing around noon ET Thursday.

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Posted In: CannabisEarningsNewsDaniel NevilleSunburn Cannabis
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