Net revenue in Q2 2024 increased by 46% year-over-year to $27.8 million
Industry-leading balance sheet with $848 million in cash and cash equivalents
ECS Botanics Holdings Ltd (ASX: ECS) (“ECS” or the “Company”) is pleased to advise that it hassecured a binding offtake agreement (“Medicann Offtake Agreement”) to supply medicinal cannabisdried flower over the next five years to MediCann Health. Under the Medicann Offtake Agreement,ECS will supply $24 million of pharmaceutical-grade cannabis dried flower to Perth-based medicinalcannabis company MediCann Health Pty Ltd (“MediCann”) beginning in January 2024. Both ECS andMedicann expect the volumes ordered under the Offtake Agreement to exceed the minimum annualvolumes.
The new Medicann Offtake Agreement follows ECS Botanics securing two binding offtakeagreements in June 2023 (see ASX announcements dated 26 June 2023), underscoring theCompany's strong presence in the B2B sector and highlighting the positive outcomes stemming fromits recent capacity and production enhancements. New protective cropping enclosures andproduction enhancements have been aimed at bolstering crop yields across additional outdoor fieldsand extending growing seasons through improvements to protective cropping enclosures.
MediCann is a leading medicinal cannabis healthcare company that provides patients with access tolocal specialist doctors and pharmacists who have experience prescribing cannabis-basedmedication. Under the offtake agreement, ECS will continue to exclusively supply two strains of GMPmedicinal cannabis dried flower to MediCann.
Commenting on the agreement, ECS Managing Director, Nan-Maree Schoerie said:
"We are excited to announce the expansion of our partnership with MediCann through this newlyextended, long-term supply agreement. MediCann's dedication to putting patients at the forefront of theirbusiness aligns perfectly with our own commitment to delivering top-tier medicinal cannabis. Ourexpertise in cultivating and manufacturing cannabis, combined with our shared focus on patient well-being, inspires us to continue to provide outstanding medicine to companies such as MediCann. Thisagreement not only reinforces our dedication to meeting the growing demand for affordable, accessible, and effective medicinal cannabis products but also marks another milestone following our June 2023agreements, totalling $11.9 million. These partnerships highlight the strong local demand for our GMPcertified, pharmaceutical-grade cannabis and provide ECS with a solid foundation to continue to deliverprofitable growth."
MediCann Founder and CEO, Matt Shales said:
"It has been highly rewarding to work closely with ECS over the past number of years and we aredelighted to strengthen our partnership even further as we secure an exclusive long-term supplyagreement with ECS Botanics for its high-quality Australian grown flowers. We look forward tocontinuing our mission to improve the quality of life of people in need of these products and to continueto build on our partnership with ECS Botanics for the long term."
Key terms of the Medicann Offtake Agreement
The Medicann Offtake Agreement commences on 1 January 2024, until which time Medicann Healthwill continue to be supplied medicinal cannabis dried flower under the current agreement. The OfftakeAgreement stipulates annual volumes of each ECS developed strain that will be supplied exclusivelyby ECS to Medicann Health. Should Medicann not purchase such volumes it will be liable for 80% ofsuch volume not purchased in any calendar year. Termination of, or changes to, the Medicann OfftakeAgreement require mutual agreement.
Authorised on behalf of ECS Botanics Holding Ltd by Nan-Maree Schoerie, Managing Director.
About ECS Botanics Holdings Ltd
ECS Botanics Holdings Ltd is an Australian medicinal cannabis cultivator and manufacturer located in NorthwestVictoria. ECS utilises progressive and innovative cultivation methodologies to produce quality medicine in asustainable way, adopting regenerative and organic horticultural practices and renewable energy sources.Licenced by the Australian Therapeutic Goods Administration to manufacture GMP (equivalent to PIC/S, EUagencies are all PIC/S members) certified products, ECS has become a leading provider of high quality, affordablemedicinal cannabis.
For further information, please contact: info@ecs-botanics.com
During the second quarter of 2024, the cannabis sector encountered a familiar set of challenges that have persisted for the past two years, with a lack of reform in both the US and Canada proving to be a significant roadblock to growth in the market.
There was some movement in the US as the Biden administration continued making progress on its goal of rescheduling cannabis from Schedule I to Schedule III, which would provide some support to the American sector. The official recommendation was put forward in late April, and the comment period ended in late July.
Companies in the sector continue to move forward and develop their offerings, and with potential catalysts ahead some investors are interested in getting involved. Looking at the key players is often a good place to get started.
Cannabis is federally illegal in the US, but state market openings have allowed some operators to thrive. Typically these firms set up vertically integrated businesses with a focus on branded products, retail networks and licenses.
While these companies have adapted to regulatory challenges, they have much to gain from country-level reform in the US, and are eager to see more welcoming federal laws that will allow their businesses to develop further.
The AdvisorShares Pure US Cannabis ETF (ARCA:MSOS) provides exposure to public companies exclusively operating within the US cannabis industry. By investing in companies that are working in states with clear guidelines, MSOS gives investors a way to be more selective about the types of cannabis companies they're investing in.
MSOS has increased in value by 13.17 percent year-to-date, reaching US$7.65 as of July 31.
ETF weight: 25.63 percent; market cap: US$2.42 billion; share price: US$11.35
Green Thumb Industries is a multi-state operator (MSO) with headquarters in Chicago, Illinois. The company produces and sells cannabis products for recreational and medical use out of 91 stores across 14 states. Its newest store is set to open in Syracuse on August 2.
The company reported its Q1 2024 earnings on May 8, reporting revenue of US$276 million, up 11 over Q1 2023, and GAAP net income of US$31 million, an annual increase of 240 percent.
ETF weight: 19.75 percent; market cap: US$2.61 billion; share price: US$4.04
Curaleaf Holdings has a significant presence in the US cannabis market, with 147 dispensaries and 19 cultivation centers in 17 states. The company is also continuing its expansion into the European cannabis sector, where it already has a strong presence. Curaleaf began trading on the Toronto Stock Exchange on December 14, 2023.
Curaleaf is one of many US companies that is optimizing its operations to cope with cannabis industry challenges. In Q3 2023, Curaleaf completed the final steps of its asset optimization plan, which included reducing inventory and adding new product offerings, resulting in a revenue of US$333 million, a year-on-year increase of 2 percent.
For Q1 2024, its earnings report also showed a 2 percent increase in revenue year-over-year, coming in at US$339 million.
ETF weight: 19.26 percent; market cap: US$1.92 billion; share price: US$10.24
Vertically integrated medical cannabis firm Trulieve Cannabis has a dominant market share in its home state of Florida, as well as in Arizona and Pennsylvania. On June 3, the company opened its 200th dispensary.
Trulieve redeemed its 9.75 percent senior secured notes, worth US$130 million, six months ahead of its original due date of June 2024, a positive sign of its financial health and stability. Q1 2024 earnings showed a 4 percent increase in revenue year-over-year, with 96 percent of earnings coming from retail sales.
ETF weight: 12.77 percent; market cap: US$1.36 billion; share price: US$3.98
Verano Holdings is a vertically integrated cannabis company. It delivers high-quality products out of its 150 Zen Leaf and MÜV retail locations, which are spread across 14 states.
Verano moved from the CSE to Cboe Canada on October 18, a move that was expected to increase the company's visibility and accessibility to investors, while leaving it in a better position to transition to a US exchange if cannabis is legalized there, according to CEO George Archos.
Its stock price has exhibited volatility in 2024, but the company announced a plan to repurchase up to US$50 million of its Class A subordinate voting shares on June 17.
ETF weight: 5.68 percent; market cap: US$411.38 million; share price: US$1.41
TerrAscend is a vertically integrated MSO with operations in the US and Canada. Its diversified ownership structure is a good representation of the growing interest in the cannabis industry from various sources. TerrAscend has 37 dispensaries in five states, including six medical dispensaries in Pennsylvania and four in Maryland.
TerrAscend also has a strong presence in New Jersey, with retail stores and a state-of-the-art cultivation and production facility. In fact, the Garden State is the company’s most profitable market.
TerrAscend’s Q1 2024 results reveal seven consecutive quarters of positive cash. TerrAscend’s net revenue in Q1 was US$80.6 million, up 16.1 percent year-on-year.
In 2018, Canada became the first G7 nation to legalize adult-use cannabis and create its own streamlined program regulated by both federal and provincial powers. Since then, companies working in the country have faced ups and downs in dealing with tight marketing rules, high tax rates and ongoing competition with the unregulated market.
The Global X Marijuana Life Sciences Index ETF (TSX:HMMJ) was the first cannabis ETF available in Canada, and it holds a variety of publicly traded companies involved in cannabis, along with several non-flower companies.
While HMMJ does not invest in US-based MSOs, it does have exposure to the US market through Canadian companies that have interests in the US cannabis industry. Overall, HMMJ is designed to give investors broad exposure to the cannabis industry, with a particular focus on North American companies.
This ETF had year-to-date gains of 21.89 percent as of July 31 and a price point of US$8.22.
ETF weight: 17.71 percent; market cap: US$3.52 billion; share price: US$124.07
Innovative Industrial Properties is a real estate investment trust that provides specialized real estate opportunities for cannabis companies in 19 states. Its properties mostly consist of processing plants, greenhouses and warehouses, with retail spaces making up a small percentage of its portfolio.
The firm has provided long-term absolute net lease agreements to some of the cannabis industry’s biggest names, including Green Thumb, Tilt Holdings (NEO:TILT,OTCQB:TLLTF), Ascend Wellness (CSE:AAWH.U,OTCQX:AAWH) and Curaleaf. The company’s attractive sale-leaseback program has helped cannabis companies access a source of capital, a much-needed workaround in the US where there are fewer traditional financing options.
ETF weight: 13.95 percent; market cap: US$941 million; share price: US$2.47
Cronos Group is the Canada-based company behind the Spinach, Peace Naturals and Lord Jones cannabis brands. The company recently re-entered the German medical cannabis market through its partnership with a German medical cannabis company called Cansativa Group, and is positioned to take advantage of potential adult-use legalization in the country. Cronos also serves the Israeli market through its subsidiary Cronos Israel.
The company’s Q1 results reveal a 30 percent year-on-year net revenue increase to US$25.3 million. In Canada, Cronos’ Spinach brand is in the top three for retail sales in the flower, edible and vape categories.
ETF weight: 9.16 percent; market cap: US$1.68 billion; share price: US$2.03
Tilray Brands has a presence in over 20 countries worldwide with a wide range of cannabis products, including edibles, flower and oils.
The company solidified its position as one of the largest players in the global cannabis market after it merged with medical cannabis brand Aphria in 2020. In 2023, Tilray acquired cannabis company HEXO — a move that contributed to a 6 percent year-on-year increase in total revenue on a constant-currency basis.
The bulk of Tilray’s sales lies in the Canadian and international medical cannabis export markets. It has also grown its portfolio of brands in the alcohol segment.
The company reported record financial results for its fiscal year ended May 31, 2024, with a 26 percent annual increase in net revenue overall and a 24 percent increase for its cannabis segment. Tilray’s alcohol segment saw the largest growth in fiscal 2024, with net revenue up 113 percent year-over-year.
ETF weight: 6.6 percent; market cap: US$612.46 million; share price: US$2.32
SNDL, formerly known as Sundial Growers, is the largest private-sector liquor and cannabis retailer on the Canadian market.
SNDL has rebounded from its difficult 2023, which saw it close its Olds, Alberta, cannabis facility in October, and its share price took a big hit on the news. The company took steps during the year to reduce its debt and introduced new products to the SNDL lineup.
Its share price shot up in mid-March following the release of its full year 2023 results and it has remained elevated since. As for the first quarter of 2024, SNDL reported a 4 percent increase in net revenue for Q1 2024, driven by cannabis retail and operations, as well as a record gross margin of US$50.4 million.
ETF weight: 4 percent; market cap: US$826 million; share price: US$7.88
Canopy Growth is a company that’s grown alongside Canada’s cannabis industry. Founded in 2013, it has become one of the largest producers of cannabis in the world, fostering brand deals with celebrities like Martha Stewart and Snoop Dogg.
On May 30, Canopy Growth released its Q4 and fiscal year 2024 financial results, which showed a net revenue increase of 7 percent year-on-year, as well as reductions in cash burn, expenses and debt.
“With no material debt maturing until 2026, Canopy is equipped to capitalize on growth opportunities and enhance shareholder value," said Judy Hong, the company’s chief financial officer, in the release.
Each investor will have to think and act for themselves to manage their own risk exposure, but it’s no secret that cannabis stocks have taken a beating for some time now. While financial experts point to the long-term upside of US operators as more state markets expand, the stock market has not been kind to these names lately.
Cannabis investments are extremely young in the grand scheme of the investment universe. There is an exciting and refreshing element to these stocks, but the market has always been characterized by volatility and unpredictability.
While wild, spontaneous swings in the open market have become less common, cannabis stocks are often moved — both positively and negatively — by big pieces of market news or legalization updates.
Investors may choose to get exposure to the cannabis market as a way to participate in the development of a new drug market with consumer packaged goods capabilities. Some participants are bullish on the industry's long-term outlook and expect more welcoming laws in the US and across the world to provide upward momentum.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
Net revenue in Q2 2024 increased by 46% year-over-year to $27.8 million
Industry-leading balance sheet with $848 million in cash and cash equivalents
Announced expansion of Cronos GrowCo designed to fuel global growth
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) ("Cronos" or the "Company") today announced its 2024 second quarter business results.
"Cronos achieved its highest quarterly net revenue on record in Q2 2024 at $27.8 million, up 46% year-over-year. The top line was propelled by 46% growth year-over-year in Canada, 27% growth year-over-year in Israel, growth in Germany and the initiation of sales in the United Kingdom. These results reflect the hard work and dedication of our entire team, reinforcing our confidence in sustained growth and success," said Mike Gorenstein, Chairman, President and CEO, Cronos.
"Our recent investment in our joint venture, Cronos GrowCo, is intended to ensure consistent supply of high-quality cannabis biomass, fueling our global growth initiatives. Cronos will consolidate the results of Cronos GrowCo's operations in Q3 2024, which will show the value that Cronos GrowCo provides to our supply chain," continued Mr. Gorenstein. "The Spinach ® brand continues to lead in Canada, with new introductions like Spinach Grindz™ and SOURZ Fully Blasted 10mg THC gummies contributing to revenue growth in Q2. The Lord Jones ® brand also enhanced its offerings with new vape and pre-roll products, strengthening our market presence. Internationally, our leading medical brand, PEACE NATURALS ® , successfully expanded into the UK and continues to solidify top-tier positioning in the German market. In Israel, our team continues to focus on bringing new high-quality strains to market under the PEACE NATURALS ® brand to complement our popular hero strains, GMO and Wedding Cake, which have driven significant volume growth. At Cronos we continue to focus on quality and innovation at every turn, all while maintaining a strong balance sheet, positioning the company for growth."
Consolidated Financial Results
In the second quarter of 2023, the Company exited its U.S. hemp-derived CBD operations. The exit of the U.S. operations represented a strategic shift, and as such, qualifies for reporting as discontinued operations in our condensed consolidated statements of net loss and comprehensive income (loss). Prior period amounts have been reclassified to reflect the discontinued operations classification of the U.S. operations.
The tables below set forth our condensed consolidated results of continuing operations, expressed in thousands of U.S. dollars for the periods presented. Our condensed consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods.
(in thousands of USD) | Three months ended June 30, | Change | Six months ended June 30, | Change | ||||||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||||||||||
Consolidated net revenue | $ | 27,762 | $ | 19,021 | $ | 8,741 | 46 | % | $ | 53,050 | $ | 38,516 | $ | 14,534 | 38 | % | ||||||||||||||
Cost of sales | 21,070 | 15,922 | 5,148 | 32 | % | 41,875 | 32,490 | 9,385 | 29 | % | ||||||||||||||||||||
Inventory write-down | 395 | — | 395 | N/A | 395 | — | 395 | N/A | ||||||||||||||||||||||
Gross profit | $ | 6,297 | $ | 3,099 | $ | 3,198 | 103 | % | $ | 10,780 | $ | 6,026 | $ | 4,754 | 79 | % | ||||||||||||||
Gross margin ( i ) | 23 | % | 16 | % | N/A | 7 | pp | 20 | % | 16 | % | N/A | 4 | pp | ||||||||||||||||
Net loss (ii) | $ | (8,759 | ) | $ | (5,663 | ) | $ | (3,096 | ) | (55 | )% | $ | (11,243 | ) | $ | (23,698 | ) | $ | 12,455 | 53 | % | |||||||||
Adjusted EBITDA (iii) | $ | (11,051 | ) | $ | (15,905 | ) | $ | 4,854 | 31 | % | $ | (21,720 | ) | $ | (31,587 | ) | $ | 9,867 | 31 | % | ||||||||||
Other Data | ||||||||||||||||||||||||||||||
Cash and cash equivalents (iv) | $ | 848,189 | $ | 409,428 | $ | 438,761 | 107 | % | ||||||||||||||||||||||
Short-term investments (iv) | — | 431,510 | (431,510 | ) | (100 | )% | ||||||||||||||||||||||||
Capital expenditures (v) | 916 | 502 | 414 | 82 | % | 2,910 | 1,306 | 1,604 | 123 | % |
(i) Gross margin is defined as gross profit divided by net revenue.
(ii) The increase year-over-year in quarterly net loss was primarily driven by an impairment loss on other investments in Q2 2024.
(iii) See "Non-GAAP Measures" for more information, including a reconciliation of adjusted earnings (loss) before interest, taxes, depreciation and amortization ("Adjusted EBITDA") to net income (loss).
(iv) Dollar amounts are as of the last day of the period indicated.
(v) Capital expenditures represent component information of investing activities and is defined as the sum of purchase of property, plant and equipment, and purchase of intangible assets.
Second Quarter 2024
Business Updates
Transaction with Cronos GrowCo
On June 20, 2024, Cronos announced an expansion of Cronos Growing Company Inc. ("Cronos GrowCo"). The investment will be funded by an additional credit facility provided by Cronos and is intended to assist GrowCo's expansion of its purpose-built cannabis facility to address the increased global market demand for high-quality cannabis flower.
Key highlights of the investment:
The Canadian cannabis market has a shortage of high-quality biomass and we anticipate the expansion will aid our ability to supply markets we operate in, while also supporting the potential for additional expansion.
Brand and Product Portfolio
Spinach ®
Spinach ® has solidified itself as the go-to brand for a wide array of products featuring different cannabinoid combinations, potency ranges and flavor profiles. In the edibles category, the Spinach ® brand held a 15.6% market share in Q2 2024, according to Hifyre. We are continuously evolving the product offerings and bringing new strategies to market that have contributed to this success. A key addition to our product lineup is the 1-piece 10mg THC edible called Fully Blasted under the SOURZ by Spinach ® brand, which hit select markets in March and debuted in Ontario, Canada's largest market, in July. In Q2 2024, we also launched a mixed flavor pack, the SOURZ by Spinach ® Tropical Party Pack, which introduces new gummies with bold tropical flavors: Peach Passionfruit, Pineapple Coconut and Strawberry Guava.
Cronos' strong cannabis cultivar breeding program and portfolio of genetics continued to drive growth, propelling the Spinach ® brand to become the number one flower brand in Canada, with a 6.2% market share in Q2 2024, according to Hifyre. In Q2 2024, we introduced Spinach Grindz™, a milled flower offering utilizing our Citrus Crush and Cookie Dough strains, designed for convenient use in pre-rolls or vaporizers. Our proprietary genetics breeding program continues to provide our portfolio with winning cultivars that allow us to launch differentiated products across markets.
The Spinach ® brand was ranked fourth in the vape category in Q2 2024, holding a 6.8% market share, according to Hifyre. Our performance in the vape category is led by top selling products Pink Lemonade 1.2g, Blueberry Dynamite 1g, Strawberry Slurricane 1.2g and Rocket Icicle 1.2g. We continue to develop this portfolio to bring a variety of flavor and cannabinoid combinations to market in formats and sizes consumers' desire.
In Q2 2024, Spinach ® was ranked ninth in the pre-roll category with 2.5% market share, according to Hifyre. In Q2 2024, Spinach ® outpaced category growth, growing +17% year-over-year vs. category growth of +9% year-over-year, according to Hifyre. We expect this category to be key to future growth which is why we are committed to our pursuit of evolving and innovating within our pre-roll portfolio. Our top priority is to continue to utilize our robust product development capabilities to formulate winning products for consumers.
Lord Jones ®
Following a successful launch late last year, our Lord Jones ® Hash Fusions pre-rolls rose to be the number one hash infused pre-roll in Q2 2024, according to Hifyre. To build on that lead, in April we expanded the offering by launching Sour Blueberry and Snow Lotus strains within our infused pre-roll lineup. These infused pre-rolls were designed with an optimized ratio of ice water hash to flower, meticulously researched and sensory-tested to drive a smoother consumption experience and preserve the flowers' terpene-rich, bold flavors.
In April 2024, Cronos expanded the Lord Jones ® live resin vape portfolio with the introduction of Gorilla Z. The Lord Jones ® vapes feature sought-after cultivars that deliver a true-to-plant flavorful full-spectrum live resin experience. Crafted with the discerning cannabis consumer in mind, these products embody a commitment to excellence, offering a combination of curated strains, pure live resin, and elegant, high-quality hardware.
Our Lord Jones ® products across pre-rolls, vapes, and edibles continue to gain traction in their respective categories, and we are excited about the growth we are seeing from this brand.
PEACE NATURALS ®
In Israel, we continue to drive strong performance powered by our advanced genetic breeding program and high-quality cultivation capabilities. Global genetics such as Wedding Cake and GMO lead our portfolio in Israel and have helped to maintain and grow share for the PEACE NATURALS ® brand. In Q2 the team continued to bring new and exciting strains to market launching four new cultivars, GG4, Key Limez Punch, Pink Sherb and GMO Lite, providing consumers with additional variety and excitement as part of the PEACE NATURALS ® flower portfolio.
In Germany and the UK, we are experiencing strong traction with our proprietary genetics, such as GMO and Wedding Cake, under the PEACE NATURALS ® brand. The expansion of Cronos GrowCo will help enable Cronos to execute on these growth opportunities and others as they become available.
Global Supply Chain
Cronos GrowCo reported to the Company preliminary unaudited net revenue to third parties, excluding sales to the Company, of approximately $2.7 million in the second quarter of 2024. Cronos previously provided Cronos GrowCo with a senior secured credit facility and combined with the new credit facility to fund the expansion project, the total outstanding balance is approximately $74 million as of June 30, 2024, following a principal repayment on the original credit facility of $1.2 million by Cronos GrowCo in Q2 2024. In addition to principal repayment, Cronos also received $1.4 million in interest payments from Cronos GrowCo, totaling approximately $2.6 million in cash payments to Cronos in Q2 2024. For additional information, refer to "Transaction with Cronos GrowCo" above.
Guidance and Outlook
The Company reiterates its previously announced operating expense savings target of $5 to $10 million on a standalone basis in 2024 primarily driven by savings in general and administrative, sales and marketing and research and development. The organizational and cost savings initiatives are intended to position the Company to drive profitable and sustainable growth over time. The operating expense savings target excludes the impact of the consolidation of Cronos GrowCo's results into the Company's financial statements.
Due to the additional $51 million ($70 million CAD) investment in Cronos GrowCo and resulting facility expansion, we no longer anticipate that our net change in cash, defined as the sum of cash and cash equivalents and short-term investments will be positive in 2024. We expect the investment to expand Cronos GrowCo's purpose-built cannabis facility will aid our ability to service existing markets and potentially take advantage of additional growth opportunities.
Cronos continues to monitor the conflict involving Israel, Hamas, Iran and other stakeholders in the region (the "Middle East Conflict") and the potential impacts the conflict could have on the Company's personnel and business in Israel and the recorded amounts of assets and liabilities related to the Company's operations in Israel. The extent to which the Middle East Conflict may impact the Company's personnel, business and activities will depend on future developments which remain highly uncertain and cannot be predicted. It is possible that the recorded amounts of assets and liabilities related to the Company's operations in Israel could change materially in the near term.
These statements are forward-looking and actual results may differ materially. Refer to "Forward-Looking Statements" below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Conference Call
The Company will host a conference call and live audio webcast on Thursday, August 8, 2024, at 8:30 a.m. ET to discuss 2024 Second Quarter business results. An audio replay of the call will be archived on the Company's website for replay. Instructions for the live audio webcast are provided on the Company's website at https://ir.thecronosgroup.com/events-presentations .
About Cronos
Cronos is an innovative global cannabinoid company committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos' diverse international brand portfolio includes Spinach ® , PEACE NATURALS ® and Lord Jones ® . For more information about Cronos and its brands, please visit: thecronosgroup.com.
Forward-Looking Statements
This press release contains information that constitutes forward-looking information and forward-looking statements within the meaning of applicable securities laws and court decisions (collectively, "Forward-Looking Statements"), which are based upon our current internal expectations, estimates, projections, assumptions and beliefs. All information that is not clearly historical in nature may constitute Forward-Looking Statements. In some cases, Forward-Looking Statements can be identified by the use of forward-looking terminology, such as "expect", "likely", "may", "will", "should", "intend", "anticipate", "potential", "proposed", "estimate" and other similar words, expressions and phrases, including negative and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussion of strategy. Forward-Looking Statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of historical fact.
Forward-Looking Statements include, but are not limited to, statements with respect to:
Certain of the Forward-Looking Statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below.
The Forward-Looking Statements contained herein are based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including: (i) our inability to achieve our target cash and cash equivalents and short-term investment balances for 2024; (ii) our ability to effectively navigate developments related to the Anti-Dumping Investigation and its impact on our operations in Israel; (iii) our ability to effectively navigate developments related to the Middle East Conflict and its impact on our employees and operations in Israel, the supply of product in the market and demand for product by medical patients in Israel; (iv) our ability to efficiently and effectively distribute our PEACE NATURALS ® brand in Germany with our strategic partner Cansativa and in the UK with our strategic partner GROW ® Pharma and our ability to efficiently and effectively distribute products in Australia with our strategic partner Vitura; (v) our ability to realize the expected cost-savings and other benefits related to the wind-down of our operations at our Winnipeg, Manitoba facility, (vi) our ability to realize the expected cost-savings, efficiencies and other benefits of our Realignment and other announced cost-cutting measures and employee turnover related thereto; (vii) our ability to efficiently and effectively wind down certain production activities at the Peace Naturals Campus, receive the benefits of the change in the nature of our operations at our Peace Naturals Campus and acquire raw materials on a timely and cost-effective basis from third parties, including Cronos GrowCo; (viii) the timely completion of the expansion of Cronos GrowCo's purpose-built cannabis facility and the ability of Cronos GrowCo to repay the Term Loan B; (ix) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our acquisitions and strategic investments; (x) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments; (xi) government regulation of our activities and products including, but not limited to, the areas of cannabis taxation and environmental protection; (xii) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; (xiii) consumer interest in our products and brands; (xiv) our ability to accurately forecast consumer demand and supply such demand; (xv) our ability to differentiate our products, including through the utilization of rare cannabinoids; (xvi) competition; (xvii) anticipated and unanticipated costs; (xviii) our ability to generate cash flow from operations; (xix) our ability to conduct operations in a safe, efficient and effective manner; (xx) our ability to hire and retain qualified staff, and acquire equipment and services in a timely and cost-efficient manner; (xxi) our ability to exercise the PharmaCann Option and realize the anticipated benefits of the transaction with PharmaCann; (xxii) our ability to complete planned dispositions, and, if completed, obtain our anticipated sales price; (xxiii) general economic, financial market, regulatory and political conditions in which we operate; (xxiv) management's perceptions of historical trends, current conditions and expected future developments; and (xxv) other considerations that management believes to be appropriate in the circumstances. While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.
By their nature, Forward-Looking Statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the Forward-Looking Statements in this press release and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf. Such factors include, without limitation, negative impacts on our business and operations in Israel due to the Anti-Dumping Investigation, including that we may not be able to produce, import or sell our products in Israel as a result thereof; negative impacts on our employees, business and operations in Israel due to the Middle East Conflict, including that we may not be able to produce, import or sell our products or protect our people or facilities in Israel during the Middle East Conflict, the supply of product in the market and the demand for product by medical patients in Israel; that we may not be able to successfully continue to distribute our products in Germany, Australia and the UK or generate material revenue from sales in those markets; that we may not be able to achieve the anticipated benefits of the wind-down of our operations at our Winnipeg, Manitoba facility or be able to access raw materials on a timely and cost-effective basis from third-parties; that we may be unable to further streamline our operations and reduce expenses; that we may not be able to effectively and efficiently re-enter the U.S. market in the future; that we may not be able to access raw materials on a timely and cost-effective basis from third-parties, including Cronos GrowCo; that Cronos GrowCo may not be able to complete the expansion of its purpose-built cannabis facility within a reasonable time or repay its borrowings under Term Loan B; the military conflict between Russia and Ukraine may disrupt our operations and those of our suppliers and distribution channels and negatively impact the demand for and use of our products; the risk that cost savings and any other synergies from the Altria Investment may not be fully realized or may take longer to realize than expected; failure to execute key personnel changes; the risks that our Realignment, the change in the nature of our operations at the Peace Naturals Campus and our further leveraging of our strategic partnerships will not result in the expected cost-savings, efficiencies and other benefits or will result in greater than anticipated turnover in personnel; lower levels of revenues; the lack of consumer demand for our products; our inability to accurately forecast consumer demand; our inability to reduce expenses at the level needed to meet our projections; our inability to manage disruptions in credit markets; unanticipated future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; growth opportunities not turning out as expected; the lack of cash flow necessary to execute our business plan (either within the expected timeframe or at all); difficulty raising capital; the potential adverse effects of judicial, regulatory or other proceedings, or threatened litigation or proceedings, on our business, financial condition, results of operations and cash flows; volatility in and/or degradation of general economic, market, industry or business conditions; compliance with applicable environmental, economic, health and safety, energy and other policies and regulations and in particular health concerns with respect to vaping and the use of cannabis and U.S. hemp products in vaping devices; the unexpected effects of actions of third parties such as competitors, activist investors or federal (including U.S. federal), state, provincial, territorial or local regulatory authorities or self-regulatory organizations; adverse changes in regulatory requirements in relation to our business and products; legal or regulatory obstacles that could prevent us from being able to exercise the PharmaCann Option and thereby realize the anticipated benefits of the transaction with PharmaCann; dilution of our fully diluted ownership of PharmaCann and the loss of our rights as a result of that dilution; our failure to improve our internal control environment and our systems, processes and procedures; and the factors discussed under Part I, Item 1A "Risk Factors" of the Annual Report on Form 10-K for the year ended December 31, 2023 and under Part II, Item 1A "Risk Factors" in our Quarterly Reports. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on Forward-Looking Statements.
Forward-Looking Statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned not to place undue reliance on these Forward-Looking Statements because of their inherent uncertainty and to appreciate the limited purposes for which they are being used by management. While we believe that the assumptions and expectations reflected in the Forward-Looking Statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-Looking Statements are made as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We undertake no obligation to update or revise any Forward-Looking Statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such Forward-Looking Statements. The Forward-Looking Statements contained in this press release and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf are expressly qualified in their entirety by these cautionary statements.
As used in this press release, "CBD" means cannabidiol and "U.S. hemp" has the meaning given to the term "hemp" in the U.S. Agricultural Improvement Act of 2018, including hemp-derived CBD.
Cronos Group Inc. |
Condensed Consolidated Balance Sheets |
(In thousands of U.S. dollars, except share amounts, unaudited) |
As of June 30, 2024 | As of December 31, 2023 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 848,189 | $ | 669,291 | |||
Short-term investments | — | 192,237 | |||||
Accounts receivable, net | 16,179 | 13,984 | |||||
Interest receivable | 5,183 | 10,012 | |||||
Other receivables | 7,227 | 6,341 | |||||
Current portion of loans receivable, net | 4,875 | 5,541 | |||||
Inventory, net | 29,182 | 30,495 | |||||
Prepaids and other current assets | 5,246 | 5,405 | |||||
Held-for-sale assets | 19,197 | — | |||||
Total current assets | 935,278 | 933,306 | |||||
Equity method investments, net | 21,226 | 19,488 | |||||
Other investments | 3,168 | 35,251 | |||||
Non-current portion of loans receivable, net | 73,165 | 69,036 | |||||
Property, plant and equipment, net | 36,964 | 59,468 | |||||
Right-of-use assets | 1,079 | 1,356 | |||||
Goodwill | 1,024 | 1,057 | |||||
Intangible assets, net | 19,103 | 21,078 | |||||
Other assets | 41 | 45 | |||||
Total assets | $ | 1,091,048 | $ | 1,140,085 | |||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable | $ | 7,840 | $ | 12,130 | |||
Income taxes payable | 61 | 64 | |||||
Accrued liabilities | 23,846 | 27,736 | |||||
Current portion of lease obligation | 931 | 994 | |||||
Derivative liabilities | 21 | 102 | |||||
Current portion due to non-controlling interests | 358 | 373 | |||||
Total current liabilities | 33,057 | 41,399 | |||||
Non-current portion due to non-controlling interests | 1,137 | 1,003 | |||||
Non-current portion of lease obligation | 1,062 | 1,559 | |||||
Total liabilities | 35,256 | 43,961 | |||||
Shareholders' equity | |||||||
Share capital | 616,379 | 613,725 | |||||
Additional paid-in capital | 49,298 | 48,449 | |||||
Retained earnings | 405,650 | 416,719 | |||||
Accumulated other comprehensive gain (loss) | (12,013 | ) | 20,678 | ||||
Total equity attributable to shareholders of Cronos Group | 1,059,314 | 1,099,571 | |||||
Non-controlling interests | (3,522 | ) | (3,447 | ) | |||
Total shareholders' equity | 1,055,792 | 1,096,124 | |||||
Total liabilities and shareholders' equity | $ | 1,091,048 | $ | 1,140,085 | |||
Cronos Group Inc. | |||
Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(In thousands of U.S. dollars, except share and per share amounts, unaudited) | 2024 | 2023 | 2024 | 2023 | |||||||||||
Net revenue, before excise taxes | $ | 38,678 | $ | 25,798 | $ | 74,045 | $ | 52,352 | |||||||
Excise taxes | (10,916 | ) | (6,777 | ) | (20,995 | ) | (13,836 | ) | |||||||
Net revenue | 27,762 | 19,021 | 53,050 | 38,516 | |||||||||||
Cost of sales | 21,070 | 15,922 | 41,875 | 32,490 | |||||||||||
Inventory write-down | 395 | — | 395 | — | |||||||||||
Gross profit | 6,297 | 3,099 | 10,780 | 6,026 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 4,330 | 5,297 | 9,662 | 11,038 | |||||||||||
Research and development | 962 | 1,107 | 1,959 | 3,146 | |||||||||||
General and administrative | 12,767 | 13,451 | 21,674 | 25,307 | |||||||||||
Restructuring costs | 547 | — | 630 | — | |||||||||||
Share-based compensation | 2,236 | 2,331 | 4,251 | 4,866 | |||||||||||
Depreciation and amortization | 1,016 | 1,533 | 2,139 | 3,058 | |||||||||||
Impairment loss on long-lived assets | — | — | 1,974 | — | |||||||||||
Total operating expenses | 21,858 | 23,719 | 42,289 | 47,415 | |||||||||||
Operating loss | (15,561 | ) | (20,620 | ) | (31,509 | ) | (41,389 | ) | |||||||
Other income | |||||||||||||||
Interest income, net | 13,451 | 12,471 | 27,696 | 23,646 | |||||||||||
Share of income (loss) from equity method investments | 917 | 270 | 2,365 | (226 | ) | ||||||||||
Gain (loss) on revaluation of financial instruments | (3,615 | ) | 5,193 | (6,257 | ) | (2,565 | ) | ||||||||
Impairment loss on other investments | (12,916 | ) | — | (25,650 | ) | — | |||||||||
Foreign currency transaction gain (loss) | 6,543 | (3,174 | ) | 19,802 | (4,817 | ) | |||||||||
Other, net | 248 | 17 | (422 | ) | 37 | ||||||||||
Total other income | 4,628 | 14,777 | 17,534 | 16,075 | |||||||||||
Loss before income taxes | (10,933 | ) | (5,843 | ) | (13,975 | ) | (25,314 | ) | |||||||
Income tax benefit | (2,174 | ) | (180 | ) | (2,732 | ) | (1,616 | ) | |||||||
Loss from continuing operations | (8,759 | ) | (5,663 | ) | (11,243 | ) | (23,698 | ) | |||||||
Loss from discontinued operations | — | (2,834 | ) | — | (4,056 | ) | |||||||||
Net loss | (8,759 | ) | (8,497 | ) | (11,243 | ) | (27,754 | ) | |||||||
Net loss attributable to non-controlling interest | (2 | ) | (137 | ) | (245 | ) | (225 | ) | |||||||
Net loss attributable to Cronos Group | $ | (8,757 | ) | $ | (8,360 | ) | $ | (10,998 | ) | $ | (27,529 | ) | |||
Comprehensive income (loss) | |||||||||||||||
Net loss | $ | (8,759 | ) | $ | (8,497 | ) | $ | (11,243 | ) | $ | (27,754 | ) | |||
Other comprehensive income (loss) | |||||||||||||||
Foreign exchange gain (loss) on translation | (10,160 | ) | 16,580 | (32,521 | ) | 18,994 | |||||||||
Comprehensive income (loss) | (18,919 | ) | 8,083 | (43,764 | ) | (8,760 | ) | ||||||||
Comprehensive income (loss) attributable to non-controlling interests | 58 | (87 | ) | (75 | ) | (95 | ) | ||||||||
Comprehensive income (loss) attributable to Cronos Group | $ | (18,977 | ) | $ | 8,170 | $ | (43,689 | ) | $ | (8,665 | ) | ||||
Net loss per share | |||||||||||||||
Basic and diluted - continuing operations | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.06 | ) | |||
Basic and diluted - discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Basic and diluted - total | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.07 | ) | |||
Cronos Group Inc. | |
Condensed Consolidated Statements of Cash Flows | |
(In thousands of U.S. dollars, except share amounts, unaudited) |
Six months ended June 30, | |||||||
2024 | 2023 | ||||||
Operating activities | |||||||
Net loss | $ | (11,243 | ) | $ | (27,754 | ) | |
Adjustments to reconcile net loss to cash used in operating activities: | |||||||
Share-based compensation | 4,251 | 4,887 | |||||
Depreciation and amortization | 3,244 | 4,785 | |||||
Impairment loss on long-lived assets | 1,974 | 205 | |||||
Impairment loss on other investments | 25,650 | — | |||||
Loss from investments | 3,732 | 2,955 | |||||
Changes in expected credit losses on long-term financial assets | 1,021 | (1,146 | ) | ||||
Foreign currency transaction (gain) loss | (19,802 | ) | 4,817 | ||||
Other non-cash operating activities, net | 829 | (554 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | (2,723 | ) | 10,623 | ||||
Interest receivable | 1,174 | (10,243 | ) | ||||
Other receivables | (1,009 | ) | (200 | ) | |||
Prepaids and other current assets | (5 | ) | 480 | ||||
Inventory | 292 | (7,259 | ) | ||||
Accounts payable | (4,482 | ) | (2,478 | ) | |||
Income taxes payable | (47 | ) | (32,801 | ) | |||
Accrued liabilities | (3,316 | ) | (5,784 | ) | |||
Cash flows used in operating activities | (460 | ) | (59,467 | ) | |||
Investing activities | |||||||
Purchase of short-term investments | — | (479,763 | ) | ||||
Proceeds from short-term investments | 187,447 | 169,418 | |||||
Dividends received from equity method investment | — | 1,299 | |||||
Advances on loans receivable | (8,836 | ) | — | ||||
Proceeds from repayment on loans receivable | 5,298 | 11,388 | |||||
Purchase of property, plant and equipment | (2,453 | ) | (1,298 | ) | |||
Purchase of intangible assets | (457 | ) | (8 | ) | |||
Cash flows provided by (used in) investing activities | 180,999 | (298,964 | ) | ||||
Financing activities | |||||||
Withholding taxes paid on share-based awards | (905 | ) | (782 | ) | |||
Cash flows used in financing activities | (905 | ) | (782 | ) | |||
Effect of foreign currency translation on cash and cash equivalents | (736 | ) | 3,997 | ||||
Net change in cash and cash equivalents | 178,898 | (355,216 | ) | ||||
Cash and cash equivalents, beginning of period | 669,291 | 764,644 | |||||
Cash and cash equivalents, end of period | $ | 848,189 | $ | 409,428 | |||
Supplemental cash flow information | |||||||
Interest paid | $ | — | $ | — | |||
Interest received | $ | 28,291 | $ | 13,385 | |||
Income taxes paid | $ | 614 | $ | 32,995 | |||
Non-GAAP Measures
Cronos Group reports its financial results in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP"). This press release refers to measures not recognized under U.S. GAAP ("non-GAAP measures"). These non-GAAP measures do not have a standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these non-GAAP measures are provided as a supplement to corresponding U.S. GAAP measures to provide additional information regarding the results of operations from management's perspective. Accordingly, non-GAAP measures should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. All non-GAAP measures presented in this press release are reconciled to their closest reported U.S. GAAP measure. Reconciliations of historical adjusted financial measures to corresponding U.S. GAAP measures are provided below.
Adjusted EBITDA
Management reviews Adjusted EBITDA, a non-GAAP measure, which excludes non-cash items and items that do not reflect management's assessment of ongoing business performance. Management defines Adjusted EBITDA as net income (loss) before interest, tax expense (benefit), depreciation and amortization adjusted for: share of (income) loss from equity method investments; impairment loss on goodwill and intangible assets; impairment loss on long-lived assets; (gain) loss on revaluation of derivative liabilities; (gain) loss on revaluation of financial instruments; transaction costs related to strategic projects; impairment loss on other investments; foreign currency transaction loss; other, net; restructuring costs; inventory write-downs resulting from restructuring actions; share-based compensation; and financial statement review costs and reserves related to the restatements of our 2019 and 2021 interim financial statements (the "Restatements"), including the costs related to the settlement of the Securities and Exchange Commission's ("SEC") and the Ontario Securities Commission's ("OSC") investigation of the Restatements and legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement (see Part II, Item 1 "Legal Proceedings" of our Quarterly Report on Form 10-Q for the period ended June 30, 2024 for a discussion of the shareholder class action complaints relating to the restatement of the 2019 interim financial statements and the settlement of the SEC's and the OSC's investigations of the Restatements). Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.
Management believes that Adjusted EBITDA provides the most useful insight into underlying business trends and results and provides a more meaningful comparison of period-over-period results. Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets.
The following tables set forth a reconciliation of Net income (loss) as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated:
Three months ended June 30, 2024 | |||||||||||
Continuing Operations | Discontinued Operations | Total | |||||||||
Net loss | $ | (8,759 | ) | $ | — | $ | (8,759 | ) | |||
Interest income, net | (13,451 | ) | — | (13,451 | ) | ||||||
Income tax benefit | (2,174 | ) | — | (2,174 | ) | ||||||
Depreciation and amortization | 1,513 | – | 1,513 | ||||||||
EBITDA | (22,871 | ) | — | (22,871 | ) | ||||||
Share of income from equity method investments | (917 | ) | — | (917 | ) | ||||||
Loss on revaluation of financial instruments (ii) | 3,615 | — | 3,615 | ||||||||
Impairment loss on other investments (iii) | 12,916 | — | 12,916 | ||||||||
Foreign currency transaction gain | (6,543 | ) | — | (6,543 | ) | ||||||
Transaction costs (iv) | 196 | — | 196 | ||||||||
Other, net (v) | (248 | ) | — | (248 | ) | ||||||
Restructuring costs (vi) | 547 | — | 547 | ||||||||
Share-based compensation (vii) | 2,236 | — | 2,236 | ||||||||
Financial statement review costs (viii) | 18 | — | 18 | ||||||||
Adjusted EBITDA | $ | (11,051 | ) | $ | — | $ | (11,051 | ) |
Three months ended June 30, 2023 | |||||||||||
Continuing Operations | Discontinued Operations | Total | |||||||||
Net loss | $ | (5,663 | ) | $ | (2,834 | ) | $ | (8,497 | ) | ||
Interest income, net | (12,471 | ) | (3 | ) | (12,474 | ) | |||||
Income tax benefit | (180 | ) | — | (180 | ) | ||||||
Depreciation and amortization | 2,265 | 115 | 2,380 | ||||||||
EBITDA | (16,049 | ) | (2,722 | ) | (18,771 | ) | |||||
Share of income from equity method investments | (270 | ) | — | (270 | ) | ||||||
Impairment loss on long-lived assets ( i ) | — | 205 | 205 | ||||||||
Gain on revaluation of financial instruments (ii) | (5,193 | ) | — | (5,193 | ) | ||||||
Foreign currency transaction loss | 3,174 | — | 3,174 | ||||||||
Other, net (v) | (17 | ) | 163 | 146 | |||||||
Restructuring costs (vi) | — | 534 | 534 | ||||||||
Share-based compensation (vii) | 2,331 | 5 | 2,336 | ||||||||
Financial statement review costs (viii) | 119 | — | 119 | ||||||||
Inventory write-down (ix) | — | 839 | 839 | ||||||||
Adjusted EBITDA | $ | (15,905 | ) | $ | (976 | ) | $ | (16,881 | ) |
Six months ended June 30, 2024 | |||||||||||
Continuing Operations | Discontinued Operations | Total | |||||||||
Net loss | $ | (11,243 | ) | $ | — | $ | (11,243 | ) | |||
Interest income, net | (27,696 | ) | — | (27,696 | ) | ||||||
Income tax benefit | (2,732 | ) | — | (2,732 | ) | ||||||
Depreciation and amortization | 3,244 | — | 3,244 | ||||||||
EBITDA | (38,427 | ) | — | (38,427 | ) | ||||||
Share of income from equity method investments | (2,365 | ) | — | (2,365 | ) | ||||||
Impairment loss on long-lived assets ( i ) | 1,974 | — | 1,974 | ||||||||
Loss on revaluation of financial instruments (ii) | 6,257 | — | 6,257 | ||||||||
Impairment loss on other investments (iii) | 25,650 | — | 25,650 | ||||||||
Foreign currency transaction gain | (19,802 | ) | — | (19,802 | ) | ||||||
Transaction costs (iv) | 196 | — | 196 | ||||||||
Other, net (v) | 422 | — | 422 | ||||||||
Restructuring costs (vi) | 630 | — | 630 | ||||||||
Share-based compensation (vii) | 4,251 | — | 4,251 | ||||||||
Financial statement review costs (viii) | (506 | ) | — | (506 | ) | ||||||
Adjusted EBITDA | $ | (21,720 | ) | $ | — | $ | (21,720 | ) |
Six months ended June 30, 2023 | |||||||||||
Continuing Operations | Discontinued Operations | Total | |||||||||
Net loss | $ | (23,698 | ) | $ | (4,056 | ) | $ | (27,754 | ) | ||
Interest income, net | (23,646 | ) | (8 | ) | (23,654 | ) | |||||
Income tax benefit | (1,616 | ) | — | (1,616 | ) | ||||||
Depreciation and amortization | 4,541 | 244 | 4,785 | ||||||||
EBITDA | (44,419 | ) | (3,820 | ) | (48,239 | ) | |||||
Share of loss from equity method investments | 226 | — | 226 | ||||||||
Impairment loss on long-lived assets ( i ) | — | 205 | 205 | ||||||||
Loss on revaluation of financial instruments (ii) | 2,565 | — | 2,565 | ||||||||
Foreign currency transaction loss | 4,817 | — | 4,817 | ||||||||
Other, net (v) | (37 | ) | 163 | 126 | |||||||
Restructuring costs (vi) | — | 534 | 534 | ||||||||
Share-based compensation (vii) | 4,866 | 21 | 4,887 | ||||||||
Financial statement review costs (viii) | 395 | — | 395 | ||||||||
Inventory write-down (ix) | — | 839 | 839 | ||||||||
Adjusted EBITDA | $ | (31,587 | ) | $ | (2,058 | ) | $ | (33,645 | ) |
(i) For the three and six months ended June 30, 2024, impairment loss on long-lived assets related to the winding down of operations at Cronos Fermentation. For the three and six months ended June 30, 2023, impairment loss on long-lived assets related to certain leased properties associated with the Company's U.S. operations.
(ii) For the three and six months ended June 30, 2024 and 2023, (gain) loss on revaluation of financial instruments related primarily to the Company's equity securities in Vitura.
(iii) For the three and six months ended June 30, 2024, impairment loss on other investments represents the fair value change on the PharmaCann Option.
(iv) For the three and six months ended June 30, 2024, transactions costs represent advisory fees associated with the Cronos GrowCo expansion transaction.
(v) For the three and six months ended June 30, 2024 and 2023, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.
(vi) For the three and six months ended June 30, 2024, restructuring costs from continuing operations related to shutdown costs at the Cronos Fermentation facility as well as employee-related severance costs associated with the Realignment. For the three and six months ended June 30, 2023, restructuring costs related to employee-related severance costs and other restructuring costs associated with our U.S. operations.
(vii) For the three and six months ended June 30, 2024 and 2023, share-based compensation related to the non-cash expenses of share-based compensation awarded to employees under the Company's share-based award plans.
(viii) For the three and six months ended June 30, 2024 and 2023, financial statement review costs include costs and reserves taken related to the Restatements, costs related to the Company's responses to requests for information from various regulatory authorities relating to the Restatements and legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. For the six months ended June 30, 2024, a credit balance is presented due to an insurance recovery.
(ix) For the three and six months ended June 30, 2023, inventory write-downs relate to product destruction and obsolescence associated with the exit of our U.S. operations.
Constant Currency
To supplement the consolidated financial statements presented in accordance with U.S. GAAP, we have presented constant currency adjusted financial measures for net revenues, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for the six months ended June 30, 2024, as well as cash and cash equivalents and short-term investment balances as of June 30, 2024 compared to December 31, 2023, which are considered non-GAAP financial measures. We present constant currency information to provide a framework for assessing how our underlying operations performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period income statement results in currencies other than U.S. dollars are converted into U.S. dollars using the average exchange rates from the three and six months and comparative periods in 2023 rather than the actual average exchange rates in effect during the respective current periods; constant currency current and prior comparative balance sheet information is translated at the prior year-end spot rate rather than the current period spot rate. All growth comparisons relate to the corresponding period in 2023. We have provided this non-GAAP financial information to aid investors in better understanding the performance of our operations. The non-GAAP financial measures presented in this press release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.
The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 as well as cash and cash equivalents and short-term investments as of June 30, 2024 and December 31, 2023, both on an as-reported and constant currency basis (in thousands):
As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||
Three months ended June 30, | As Reported Change | Three months ended June 30, | Constant Currency Change | ||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Net revenue | $ | 27,762 | $ | 19,021 | $ | 8,741 | 46 | % | $ | 28,290 | $ | 9,269 | 49 | % | |||||||||||
Gross profit | 6,297 | 3,099 | 3,198 | 103 | % | 6,434 | 3,335 | 108 | % | ||||||||||||||||
Gross margin | 23 | % | 16 | % | N/A | 7 | pp | 23 | % | N/A | 7 | pp | |||||||||||||
Operating expenses | 21,858 | 23,719 | (1,861 | ) | (8 | )% | 21,861 | (1,858 | ) | (8 | )% | ||||||||||||||
Net loss from continuing operations | (8,759 | ) | (5,663 | ) | (3,096 | ) | (55 | )% | (8,162 | ) | (2,499 | ) | (44 | )% | |||||||||||
Adjusted EBITDA | (11,051 | ) | (15,905 | ) | 4,854 | 31 | % | (10,863 | ) | 5,042 | 32 | % | |||||||||||||
Six months ended June 30, | As Reported Change | Six months ended June 30, | Constant Currency Change | ||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Net revenue | $ | 53,050 | $ | 38,516 | $ | 14,534 | 38 | % | $ | 53,795 | $ | 15,279 | 40 | % | |||||||||||
Gross profit | 10,780 | 6,026 | 4,754 | 79 | % | 10,983 | 4,957 | 82 | % | ||||||||||||||||
Gross margin | 20 | % | 16 | % | N/A | 4 | pp | 20 | % | N/A | 4 | pp | |||||||||||||
Operating expenses | 42,289 | 47,415 | (5,126 | ) | (11 | )% | 42,336 | (5,079 | ) | (11 | )% | ||||||||||||||
Net loss from continuing operations | (11,243 | ) | (23,698 | ) | 12,455 | 53 | % | (10,643 | ) | 13,055 | 55 | % | |||||||||||||
Adjusted EBITDA | (21,720 | ) | (31,587 | ) | 9,867 | 31 | % | (21,508 | ) | 10,079 | 32 | % | |||||||||||||
As of March 31, | As of December 31, | As Reported Change | As of March 31, | Constant Currency Change | |||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Cash and cash equivalents | $ | 848,189 | $ | 669,291 | $ | 178,898 | 27 | % | $ | 852,752 | $ | 183,461 | 27 | % | |||||||||||
Short-term investments | — | 192,237 | (192,237 | ) | (100 | )% | — | (192,237 | ) | (100 | )% | ||||||||||||||
Total cash and cash equivalents and short-term investments | $ | 848,189 | $ | 861,528 | $ | (13,339 | ) | (2 | )% | $ | 852,752 | $ | (8,776 | ) | (1 | )% | |||||||||
Net revenue
As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||
Three months ended June 30, | As Reported Change | Three months ended June 30, | Constant Currency Change | ||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Cannabis flower | $ | 20,661 | $ | 14,014 | $ | 6,647 | 47 | % | $ | 21,058 | $ | 7,044 | 50 | % | |||||||||||
Cannabis extracts | 7,064 | 4,926 | 2,138 | 43 | % | 7,195 | 2,269 | 46 | % | ||||||||||||||||
Other | 37 | 81 | (44 | ) | (54 | )% | 37 | (44 | ) | (54 | )% | ||||||||||||||
Net revenue | $ | 27,762 | $ | 19,021 | $ | 8,741 | 46 | % | $ | 28,290 | $ | 9,269 | 49 | % |
As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||
Six months ended June 30, | As Reported Change | Six months ended June 30, | Constant Currency Change | ||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Cannabis flower | $ | 38,186 | $ | 27,142 | $ | 11,044 | 41 | % | $ | 38,812 | $ | 11,670 | 43 | % | |||||||||||
Cannabis extracts | 14,791 | 11,227 | 3,564 | 32 | % | 14,909 | 3,682 | 33 | % | ||||||||||||||||
Other | 73 | 147 | (74 | ) | (50 | )% | 74 | (73 | ) | (50 | )% | ||||||||||||||
Net revenue | $ | 53,050 | $ | 38,516 | $ | 14,534 | 38 | % | $ | 53,795 | $ | 15,279 | 40 | % |
As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||
Three months ended June 30, | As Reported Change | Three months ended June 30, | Constant Currency Change | ||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Canada | $ | 19,844 | $ | 13,595 | $ | 6,249 | 46 | % | $ | 20,210 | $ | 6,615 | 49 | % | |||||||||||
Israel | 6,889 | 5,426 | 1,463 | 27 | % | 7,036 | 1,610 | 30 | % | ||||||||||||||||
Other countries | 1,029 | — | 1,029 | N/M | 1,044 | 1,044 | N/M | ||||||||||||||||||
Net revenue | $ | 27,762 | $ | 19,021 | $ | 8,741 | 46 | % | $ | 28,290 | $ | 9,269 | 49 | % |
As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||
Six months ended June 30, | As Reported Change | Six months ended June 30, | Constant Currency Change | ||||||||||||||||||||||
2024 | 2023 | $ | % | 2024 | $ | % | |||||||||||||||||||
Canada | $ | 38,715 | $ | 28,029 | $ | 10,686 | 38 | % | $ | 39,044 | $ | 11,015 | 39 | % | |||||||||||
Israel | 13,306 | 10,487 | 2,819 | 27 | % | 13,707 | 3,220 | 31 | % | ||||||||||||||||
Other countries | 1,029 | — | 1,029 | N/M | 1,044 | 1,044 | N/M | ||||||||||||||||||
Net revenue | $ | 53,050 | $ | 38,516 | $ | 14,534 | 38 | % | $ | 53,795 | $ | 15,279 | 40 | % | |||||||||||
For the three months ended June 30, 2024, net revenue on a constant currency basis was $28.3 million, representing a 49% increase from the three months ended June 30, 2023. For the six months ended June 30, 2024, net revenue on a constant currency basis was $53.8 million, representing a 40% increase from the six months ended June 30, 2023. On a constant currency basis, net revenue increased for the three and six months ended June 30, 2024, primarily due to higher cannabis flower and extract sales in the Canadian adult-use market, higher cannabis flower sales in Israel and higher cannabis flower sales in other countries, partially offset by an adverse price/mix in the Canadian cannabis flower category driving increased excise tax payments as a percentage of revenue.
Gross profit
For the three months ended June 30, 2024, gross profit on a constant currency basis was $6.4 million, representing a 108% increase from the three months ended June 30, 2023. For the six months ended June 30, 2024, gross profit on a constant currency basis was $11.0 million, representing a 82% increase from the six months ended June 30, 2023. On a constant currency basis, gross profit increased for the three and six months ended June 30, 2024, primarily due to higher cannabis flower and extract sales in the Canadian adult-use market, higher cannabis flower sales in Israel and higher cannabis flower sales in other countries, partially offset by an adverse price/mix in the Canadian cannabis flower category driving increased excise tax payments as a percentage of revenue and higher inventory write-downs.
Operating expenses
For the three months ended June 30, 2024, operating expenses on a constant currency basis were $21.9 million, representing an 8% decrease from the three months ended June 30, 2023. For the six months ended June 30, 2024, operating expenses on a constant currency basis was $42.3 million, representing an 11% decrease from the six months ended June 30, 2023. On a constant currency basis, operating expenses decreased for the three and six months ended June 30, 2024, primarily due to lower advertising and marketing spend, lower costs associated with the achievement of Ginkgo milestones, lower professional fees, largely related to financial statement review costs, and lower salaries and benefits and insurance costs.
Net loss from continuing operations
For the three months ended June 30, 2024, net loss from continuing operations on a constant currency basis was $8.2 million, representing an increased loss of $2.5 million from the three months ended June 30, 2023. For the six months ended June 30, 2024, net loss from continuing operations on a constant currency basis was $10.6 million, representing an improvement of $13.1 million from the six months ended June 30, 2023.
Adjusted EBITDA
For the three months ended June 30, 2024, Adjusted EBITDA on a constant currency basis was $(10.9) million, representing a 32% improvement from the three months ended June 30, 2023. For the six months ended June 30, 2024, Adjusted EBITDA on a constant currency basis was $(21.5) million, representing a 32% improvement from the six months ended June 30, 2023. The improvement in Adjusted EBITDA for the three and six months ended June 30, 2024 on a constant currency basis was driven by higher cannabis flower and extract sales in the Canadian adult-use market, higher cannabis flower sales in Israel, decreases in general and administrative expenses and lower costs associated with the achievement of Ginkgo milestones, partially offset by an adverse price/mix in Canada in the cannabis flower category driving increased excise tax payments as a percentage of revenue.
Cash and cash equivalents & short-term investments
Cash and cash equivalents and short-term investments on a constant currency basis decreased 1% to $852.8 million as of June 30, 2024 from $861.5 million as of December 31, 2023. The decrease in cash and cash equivalents and short-term investments is primarily due to advances of loans receivable and purchases of property, plant and equipment in the six months ended June 30, 2024.
Foreign currency exchange rates
All currency amounts in this press release are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to "dollars" or "$" are to U.S. dollars. The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of June 30, 2024, June 30, 2023, and December 31, 2023. Transactions affecting the shareholders' equity (deficit) are translated at historical foreign exchange rates. The condensed consolidated statements of net loss and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period as reported on Bloomberg. The exchange rates used to translate from USD to Canadian dollars ("C$") and Israeli New Shekels ("ILS") are shown below:
(Exchange rates are shown as C$ per $) | As of | ||||||||||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |||||||||
Spot rate | 1.3674 | 1.3242 | 1.3243 | ||||||||
Year-to-date average rate | 1.3581 | 1.3474 | N/A |
(Exchange rates are shown as ILS per $) | As of | ||||||||||
June 30, 2024 | June 30, 2023 | December 31, 2023 | |||||||||
Spot rate | 3.7742 | 3.7051 | 3.6163 | ||||||||
Year-to-date average rate | 3.6950 | 3.5892 | N/A | ||||||||
For further information, please contact:
Shayne Laidlaw
Investor Relations
Tel: (416) 504-0004
investor.relations@thecronosgroup.com
News Provided by GlobeNewswire via QuoteMedia
Trulieve Cannabis Corp . (CSE: TRUL ) (OTCQX: TCNNF ) ("Trulieve" or "the Company"), a leading and top-performing cannabis company in the U.S., today announced its results for the quarter ended June 30, 2024. Results are reported in U.S. dollars and in accordance with U.S. Generally Accepted Accounting Principles unless otherwise indicated. Numbers may not sum perfectly due to rounding.
Q2 2024 Financial and Operational Highlights*
*See "Non-GAAP Financial Measures" below for additional information and a reconciliation to GAAP for all Non-GAAP metrics.
Recent Developments
Management Commentary
"Today marks another milestone, as Trulieve completed our first recreational sale in the state of Ohio with the successful conversion of our three locations to adult use. Second quarter results demonstrated strength in our core business with our third consecutive quarter of revenue growth and margin expansion," said Kim Rivers , Trulieve CEO. "All of the effort and investment over the past two years to set a solid foundation for long term success is paying dividends. Given our financial performance and significant scale in key markets, Trulieve is best positioned for the coming wave of growth catalysts."
Financial Highlights*
Results of Operations | For the Three Months Ended | For the Six Months Ended | |||||||||||
(Figures in millions except per | June 30, | June 30, | change | March 31, | change | June 30, | June 30, | change | |||||
Revenue | $ | 303 | $ | 282 | 8 % | $ | 298 | 2 % | $ | 601 | $ | 567 | 6 % |
Gross Profit | $ | 182 | $ | 142 | 28 % | $ | 174 | 5 % | $ | 356 | $ | 292 | 22 % |
Gross Margin % | 60 % | 50 % | 58 % | 59 % | 51 % | ||||||||
Operating Expenses | $ | 132 | $ | 433 | (70 %) | $ | 128 | 3 % | $ | 260 | $ | 566 | (54) % |
Operating Expenses % | 43 % | 154 % | 43 % | 43 % | 100 % | ||||||||
Net loss** | $ | (12) | $ | (404) | 97 % | $ | (23) | 48 % | $ | (35) | $ | (468) | (92) % |
Net loss continuing operations | $ | (11) | $ | (342) | 97 % | $ | (23) | 54 % | $ | (34) | $ | (376) | (91) % |
Adjusted net income (loss) | $ | 0 | $ | (15) | 101 % | $ | (10) | 102 % | $ | (10) | $ | (32) | (69) % |
Basic and diluted shares outstanding | 190 | 189 | 189 | 190 | 189 | ||||||||
EPS continuing operations | $ | (0.04) | $ | (1.80) | 98 % | $ | (0.16) | 72 % | $ | (0.21) | $ | (1.97) | (90 %) |
Adjusted EPS | $ | 0.00 | $ | (0.08) | 101 % | $ | (0.05) | 102 % | $ | (0.05) | $ | (0.17) | (69 %) |
Adjusted EBITDA | $ | 107 | $ | 79 | 36 % | $ | 106 | 1 % | $ | 213 | $ | 157 | 36 % |
Adjusted EBITDA Margin % | 35 % | 28 % | 36 % | 35 % | 28 % |
*See "Non-GAAP Financial Measures" below for additional information and a reconciliation to GAAP for all Non-GAAP metrics. |
**Net loss includes discontinued operations and non-controlling interest. |
Conference Call
The Company will host a conference call and live audio webcast on August 6, 2024, at 8:30 A.M. Eastern time , to discuss its second quarter 2024 financial results. Interested parties can join the conference call by dialing in as directed below. Please dial in 15 minutes prior to the call.
North American toll free: 1-844-824-3830 | Passcode: 1732811 | |
International: 1-412-542-4136 | Passcode: 1732811 |
A live audio webcast of the conference call will be available at:
Trulieve Cannabis Corp Q2 2024 Earnings
A powerpoint presentation and archived replay of the webcast will be available at:
https: //investors.trulieve.com/events
The Company's Form 10-Q for the quarter ended June 30, 2024, will be available on the SEC's website or at https://investors.trulieve.com/quarterly-results . The Company's Management Discussion and Analysis for the period and the accompanying financial statements and notes will be available under the Company's profile on https://www.sedarplus.ca/landingpage/ and on its website at https://investors.trulieve.com/quarterly-results . This news release is not in any way a substitute for reading those financial statements, including the notes to the financial statements.
Trulieve Cannabis Corp. | |||
Condensed Consolidated Balance Sheets (Unaudited) | |||
(in millions, except for share data) | |||
June 30, | December 31, | ||
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $ 355.2 | $ 201.4 | |
Restricted cash | 0.9 | 6.6 | |
Accounts receivable, net | 7.5 | 6.7 | |
Inventories | 207.6 | 213.1 | |
Income tax receivable | 6.3 | — | |
Prepaid expenses | 23.6 | 17.6 | |
Other current assets | 26.7 | 23.7 | |
Notes receivable - current portion, net | 2.2 | 6.2 | |
Assets associated with discontinued operations | 1.0 | 2.0 | |
Total current assets | 631.1 | 477.3 | |
Property and equipment, net | 678.1 | 676.4 | |
Right of use assets - operating, net | 104.3 | 95.9 | |
Right of use assets - finance, net | 56.8 | 58.5 | |
Intangible assets, net | 887.3 | 917.2 | |
Goodwill | 483.9 | 483.9 | |
Notes receivable, net | 6.0 | 7.4 | |
Other assets | 15.4 | 10.4 | |
Long-term assets associated with discontinued operations | 2.0 | 2.0 | |
TOTAL ASSETS | $ 2,864.9 | $ 2,729.1 | |
LIABILITIES | |||
Current Liabilities: | |||
Accounts payable and accrued liabilities | $ 87.2 | $ 83.2 | |
Deferred revenue | 4.3 | 1.3 | |
Notes payable - current portion | 3.9 | 3.8 | |
Operating lease liabilities - current portion | 10.8 | 10.1 | |
Finance lease liabilities - current portion | 8.1 | 7.6 | |
Construction finance liabilities - current portion | 1.7 | 1.5 | |
Contingencies | 4.6 | 4.4 | |
Liabilities associated with discontinued operations | 3.2 | 3.0 | |
Total current liabilities | 123.8 | 114.8 | |
Long-Term Liabilities: | |||
Private placement notes, net | 364.0 | 363.2 | |
Notes payable, net | 113.5 | 115.9 | |
Operating lease liabilities | 101.0 | 92.2 | |
Finance lease liabilities | 61.0 | 61.7 | |
Construction finance liabilities | 136.1 | 136.7 | |
Deferred tax liabilities | 211.1 | 207.0 | |
Uncertain tax position liabilities | 333.1 | 180.4 | |
Other long-term liabilities | 4.7 | 7.1 | |
Long-term liabilities associated with discontinued operations | 40.2 | 41.6 | |
TOTAL LIABILITIES | $ 1,488.5 | $ 1,320.4 | |
MEZZANINE EQUITY | |||
Redeemable non-controlling interest | $ 5.3 | $ — | |
SHAREHOLDERS' EQUITY | |||
Common stock, no par value; unlimited shares authorized. 187,324,658 and | $ — | $ — | |
Additional paid-in-capital | 2,056.1 | 2,055.1 | |
Accumulated deficit | (675.7) | (640.6) | |
Non-controlling interest | (9.3) | (5.9) | |
TOTAL SHAREHOLDERS' EQUITY | 1,371.1 | 1,408.6 | |
TOTAL LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS' EQUITY | $ 2,864.9 | $ 2,729.1 |
Trulieve Cannabis Corp. | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
(in millions, except for share data) | |||||||
Three Months Ended | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenue | $ 303.4 | $ 281.8 | $ 601.1 | $ 567.0 | |||
Cost of goods sold | 121.8 | 140.2 | 245.6 | 275.2 | |||
Gross profit | 181.6 | 141.6 | 355.5 | 291.8 | |||
Expenses: | |||||||
Sales and marketing | 63.2 | 61.1 | 124.3 | 121.8 | |||
General and administrative | 39.4 | 34.9 | 79.6 | 74.2 | |||
Depreciation and amortization | 28.1 | 26.1 | 55.8 | 55.7 | |||
Impairment and disposal of long-lived assets, net of (recoveries) | 1.2 | 3.3 | (0.1) | 6.7 | |||
Impairment of goodwill | — | 307.6 | — | 307.6 | |||
Total expenses | 131.9 | 432.9 | 259.6 | 566.0 | |||
Income (loss) from operations | 49.8 | (291.3) | 95.9 | (274.1) | |||
Other income (expense): | |||||||
Interest expense, net | (15.4) | (18.9) | (30.1) | (40.1) | |||
Interest income | 4.0 | 1.3 | 7.3 | 2.4 | |||
Other (expense) income, net | (1.8) | 0.6 | (4.6) | 4.7 | |||
Total other expense, net | (13.2) | (17.0) | (27.4) | (32.9) | |||
Income (loss) before provision for income taxes | 36.5 | (308.2) | 68.5 | (307.1) | |||
Provision for income taxes | 47.2 | 33.8 | 102.6 | 69.3 | |||
Net loss from continuing operations | (10.7) | (342.1) | (34.2) | (376.4) | |||
Net loss from discontinued operations, net of tax benefit of zero, | (1.6) | (64.8) | (3.0) | (96.1) | |||
Net loss | (12.3) | (406.9) | (37.2) | (472.5) | |||
Less: net income (loss) attributable to non-controlling interest | 0.0 | (2.4) | (1.4) | (3.3) | |||
Less: net loss attributable to redeemable non-controlling interest | (0.3) | — | (0.7) | — | |||
Less: net loss attributable to non-controlling interest from | — | (0.7) | — | (1.2) | |||
Net loss attributable to common shareholders | $ (12.0) | $ (403.8) | $ (35.1) | $ (468.0) | |||
Earnings Per Share (see numerator reconciliation below) | |||||||
Net loss per share - Continuing operations: | |||||||
Basic and diluted | $ (0.04) | $ (1.80) | $ (0.21) | $ (1.97) | |||
Net loss per share - Discontinued operations: | |||||||
Basic and diluted | $ (0.01) | $ (0.34) | $ (0.02) | $ (0.50) | |||
Weighted average number of common shares used in computing net | |||||||
Basic and diluted | 190.3 | 189.1 | 189.9 | 189.0 | |||
EPS Numerator Reconciliation | |||||||
Net loss attributable to common shareholders (from above) | $ (12.0) | $ (403.8) | $ (35.1) | $ (468.0) | |||
Net loss from discontinued operations, net of tax, attributable to | 1.6 | 64.1 | 3.0 | 94.9 | |||
Adjustment of redeemable non-controlling interest to maximum | 1.9 | — | (6.9) | — | |||
Net loss from continuing operations available to common | $ (8.5) | $ (339.7) | $ (39.1) | $ (373.0) |
Trulieve Cannabis Corp. | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
(in millions) | |||||||
Three Months Ended | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Cash flows from operating activities | |||||||
Net loss | $ (12.3) | $ (406.9) | $ (37.2) | $ (472.5) | |||
Adjustments to reconcile net loss to net cash provided by (used in) | |||||||
Depreciation and amortization | 28.1 | 26.2 | 55.8 | 56.6 | |||
Depreciation included in cost of goods sold | 13.3 | 17.4 | 26.8 | 30.9 | |||
Impairment and disposal of long-lived assets, net of recoveries | 1.2 | (24.3) | (0.1) | 6.7 | |||
Impairment of goodwill | — | 307.6 | — | 307.6 | |||
Amortization of operating lease right of use assets | 2.8 | 2.6 | 5.4 | 5.3 | |||
Share-based compensation | 5.0 | 0.5 | 10.1 | 2.9 | |||
Allowance for credit losses | 1.5 | 0.5 | 4.4 | 0.4 | |||
Deferred income tax expense (benefit) | (6.5) | (4.3) | 3.5 | (12.2) | |||
Loss from disposal of discontinued operations | — | 69.3 | — | 69.3 | |||
Other non-cash changes | 0.6 | 1.8 | 1.2 | 3.3 | |||
Changes in operating assets and liabilities: | |||||||
Inventories | 1.5 | 40.1 | 5.0 | 40.3 | |||
Accounts receivable | (0.7) | (2.2) | 0.7 | (0.7) | |||
Prepaid expenses and other current assets | (6.8) | 6.7 | (5.8) | 5.0 | |||
Other assets | (2.6) | (0.2) | (5.0) | 1.7 | |||
Accounts payable and accrued liabilities | (1.3) | (13.5) | (0.2) | (4.3) | |||
Income tax receivable / payable | (7.5) | (36.3) | (4.8) | (49.7) | |||
Other liabilities | 0.2 | (6.1) | 0.2 | (15.3) | |||
Operating lease liabilities | (2.1) | (2.4) | (4.3) | (4.9) | |||
Deferred revenue | 2.2 | 0.7 | 3.0 | (3.8) | |||
Uncertain tax position liabilities | 55.1 | 1.4 | 152.8 | 11.2 | |||
Other long-term liabilities | (0.3) | (2.0) | (2.4) | (0.8) | |||
Proceeds received from insurance for operating expenses | — | — | 1.5 | — | |||
Net cash provided by (used in) operating activities | 71.3 | (23.5) | 210.5 | (23.1) | |||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (26.5) | (11.0) | (42.1) | (24.7) | |||
Capitalized interest | 0.3 | (0.2) | 0.3 | (0.8) | |||
Purchases of internal use software | (6.5) | (2.3) | (11.5) | (4.4) | |||
Proceeds received from insurance recoveries on property and equipment | — | — | 0.5 | — | |||
Cash paid for licenses | (0.5) | (0.5) | (0.5) | (4.0) | |||
Payments received from notes receivable | 0.3 | 0.2 | 0.6 | 0.4 | |||
Proceeds from disposal activities | — | 7.3 | 0.7 | 8.2 | |||
Net cash used in investing activities | (33.0) | (6.5) | (51.9) | (25.3) | |||
Cash flows from financing activities | |||||||
Proceeds from non-controlling interest holders' subscription | — | — | 3.0 | — | |||
Proceeds from equity exercises | 0.0 | — | 0.2 | — | |||
Payments on notes payable | (1.5) | (1.4) | (2.4) | (4.8) | |||
Payments on finance lease obligations | (1.7) | (1.9) | (3.6) | (3.9) | |||
Payments on construction finance liabilities | (0.8) | (0.3) | (1.6) | (0.6) | |||
Payments for taxes related to net share settlement of equity awards | (0.1) | — | (0.1) | — | |||
Payments and costs related to consolidated VIE settlement transaction | (5.1) | — | (5.1) | — | |||
Distributions to subsidiary non-controlling interest | — | — | (1.1) | (0.1) | |||
Net cash used in financing activities | (9.2) | (3.5) | (10.7) | (9.3) | |||
Net increase (decrease) in cash, and cash equivalents | 29.2 | (33.5) | 147.8 | (57.7) | |||
Cash, cash equivalents, and restricted cash, beginning of period | 326.9 | 192.8 | 208.0 | 213.8 | |||
Cash and cash equivalents of discontinued operations, beginning of period | — | 2.5 | 0.3 | 5.7 | |||
Less: cash and cash equivalents of discontinued operations, end of period | — | (1.8) | — | (1.8) | |||
Cash, cash equivalents, and restricted cash, end of period | $ 356.1 | $ 159.9 | $ 356.1 | $ 159.9 | |||
The consolidated statements of cash flows include continuing operations and discontinued operations for the periods presented. |
Non-GAAP Financial Measures (Unaudited)
In addition to our results determined in accordance with GAAP, we supplement our results with non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin %, adjusted net income (loss), adjusted net income (loss) per diluted share and free cash flow. The Company calculates EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization; adjusted EBITDA as net income (loss) before net interest expense, interest income, income tax expense, depreciation and amortization and also excludes certain extraordinary items; adjusted EBITDA margin as adjusted EBITDA as % of revenue, adjusted net income (loss) as net income (loss) less certain extraordinary items; adjusted EPS as adjusted net income (loss) divided by basic and diluted shares outstanding; and free cash flow as cash flow from operations less capital expenditures. Our management uses these non-GAAP financial measures in conjunction with GAAP financial measures to evaluate our operating results and financial performance. We believe these measures are useful to investors as they are widely used measures of performance and can facilitate comparison to other companies. These non-GAAP financial measures are not, and should not be considered as, measures of liquidity. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with GAAP financial performance measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found below. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP.
Reconciliation of Non-GAAP EBITDA and Adjusted EBITDA (Unaudited)
The following table presents a reconciliation of GAAP net loss to non-GAAP EBITDA and Adjusted EBITDA for each of the periods presented:
(Amounts expressed in millions of United States dollars) | Three Months Ended | For the Six Months Ended | ||||||||
June 30, | June 30, | March 31, | June 30, | June 30, | ||||||
Net loss attributable to common shareholders | $ | (12.0) | $ | (403.8) | $ | (23.1) | $ | (35.1) | $ | (468.0) |
Add (deduct) impact of: | ||||||||||
Interest expense, net | $ | 15.4 | $ | 18.9 | $ | 14.7 | $ | 30.1 | $ | 40.1 |
Interest income | $ | (4.0) | $ | (1.3) | $ | (3.3) | $ | (7.3) | $ | (2.4) |
Provision for income taxes | $ | 47.2 | $ | 33.8 | $ | 55.4 | $ | 102.6 | $ | 69.3 |
Depreciation and amortization | $ | 28.1 | $ | 26.1 | $ | 27.8 | $ | 55.8 | $ | 55.7 |
Depreciation included in cost of goods sold | $ | 13.3 | $ | 16.0 | $ | 13.5 | $ | 26.8 | $ | 28.0 |
EBITDA (Non-GAAP) | $ | 88.0 | $ | (310.4) | $ | 85.0 | $ | 173.0 | $ | (277.3) |
EBITDA Margin (Non-GAAP) | 29 % | (110) % | 29 % | 29 % | (49) % | |||||
Impairment of goodwill | $ | — | $ | 307.6 | $ | — | $ | — | $ | 307.6 |
Impairment and disposal of long-lived assets, net of (recoveries) | $ | 1.2 | $ | 3.3 | $ | (1.4) | $ | (0.1) | $ | 6.7 |
Legislative campaign contributions | $ | 5.0 | $ | 8.6 | $ | 9.2 | $ | 14.2 | $ | 19.1 |
Acquisition, transaction, and other non-recurring costs | $ | 4.3 | $ | 5.7 | $ | 3.7 | $ | 8.0 | $ | 7.6 |
Share-based compensation | $ | 5.0 | $ | 0.5 | $ | 5.2 | $ | 10.1 | $ | 2.9 |
Other income (expense), net | $ | 1.8 | $ | (0.6) | $ | 2.7 | $ | 4.6 | $ | (4.7) |
Discontinued operations, net of tax, attributable to | $ | 1.6 | $ | 64.1 | $ | 1.4 | $ | 3.0 | $ | 94.9 |
Adjusted EBITDA (Non-GAAP) | $ | 107.0 | $ | 78.7 | $ | 105.8 | $ | 212.8 | $ | 156.8 |
Adjusted EBITDA Margin (Non-GAAP) | 35 % | 28 % | 36 % | 38 % | 53 % |
Reconciliation of Non-GAAP Adjusted Net Income (Loss) (Unaudited)
The following table presents a reconciliation of GAAP net loss to non-GAAP adjusted net income (loss), for each of the periods presented:
For the Three Months Ended | For the Six Months Ended | |||||||||
(Amounts expressed in millions of United States dollars) | June 30, | June 30, | March 31, | June 30, | June 30, | |||||
Net loss attributable to common shareholders | $ | (12.0) | $ | (403.8) | $ | (23.1) | $ | (35.1) | $ | (468.0) |
Net loss from discontinued operations, net of tax, | $ | 1.6 | $ | 64.1 | $ | 1.4 | $ | 3.0 | $ | 94.9 |
Adjustment of redeemable non-controlling interest to | $ | 1.9 | $ | — | $ | (8.8) | $ | (6.9) | $ | — |
Net loss from continuing operations available to common | $ | (8.5) | $ | (339.7) | $ | (30.6) | $ | (39.1) | $ | (373.0) |
Add (deduct) impact of: | ||||||||||
Adjustment of redeemable non-controlling interest to | $ | (1.9) | $ | — | $ | 8.8 | $ | 6.9 | $ | — |
Impairment of goodwill | $ | — | $ | 307.6 | $ | — | $ | — | $ | 307.6 |
Impairment and disposal of long-lived assets, net of (recoveries) | $ | 1.2 | $ | 3.3 | $ | (1.4) | $ | (0.1) | $ | 6.7 |
Legislative campaign contributions | $ | 5.0 | $ | 8.6 | $ | 9.2 | $ | 14.2 | $ | 19.1 |
Acquisition, transaction, and other non-recurring costs | $ | 4.3 | $ | 5.7 | $ | 3.7 | $ | 8.0 | $ | 7.6 |
Adjusted net income (loss) (Non-GAAP) | $ | 0.2 | $ | (14.6) | $ | (10.2) | $ | (10.0) | $ | (32.1) |
Reconciliation of Non-GAAP Adjusted Net Income (Loss) Per Diluted Share (Unaudited)
The following table presents a reconciliation of GAAP net loss attributable to common shareholders per share to non-GAAP adjusted net income (loss) per diluted share, for each of the periods presented:
For the Three Months Ended | For the Six Months Ended | |||||||||
(Amounts expressed are per share except for shares | June 30, 2024 | June 30, 2023 | March 31, 2024 | June 30, 2024 | June 30, 2023 | |||||
Net loss attributable to common shareholders | $ | (0.06) | $ | (2.14) | $ | (0.12) | $ | (0.18) | $ | (2.48) |
Net loss from discontinued operations, net of tax, | $ | 0.01 | $ | 0.34 | $ | 0.01 | $ | 0.02 | $ | 0.50 |
Adjustment of redeemable non-controlling interest to | $ | 0.01 | $ | — | $ | (0.05) | $ | (0.04) | $ | — |
Net loss from continuing operations available to common shareholders | $ | (0.04) | $ | (1.80) | $ | (0.16) | $ | (0.21) | $ | (1.97) |
Add (deduct) impact of: | ||||||||||
Adjustment of redeemable non-controlling interest to | $ | (0.01) | $ | — | $ | 0.05 | $ | 0.04 | $ | — |
Impairment of goodwill | $ | — | $ | 1.63 | $ | — | $ | — | $ | 1.63 |
Impairment and disposal of long-lived assets, net of (recoveries) | $ | 0.01 | $ | 0.02 | $ | (0.01) | $ | 0.00 | $ | 0.04 |
Legislative campaign contributions | $ | 0.03 | $ | 0.05 | $ | 0.05 | $ | 0.07 | $ | 0.10 |
Acquisition, transaction, and other non-recurring costs | $ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.04 | $ | 0.04 |
Adjusted net income (loss) (Non-GAAP) | $ | 0.00 | $ | (0.08) | $ | (0.05) | $ | (0.05) | $ | (0.17) |
Basic and diluted shares outstanding | 190.3 | 189.1 | 189.5 | 189.9 | 189.0 |
Reconciliation of Non-GAAP Free Cash Flow (Unaudited)
The following table presents a reconciliation of GAAP cash flow from operating activities to non-GAAP free cash flow, for each of the periods presented:
For the Three Months Ended | For the Six Months Ended | |||||||||
(Amounts expressed in millions of United States dollars) | June 30, | June 30, | March 31, | June 30, | June 30, | |||||
Cash flow from operating activities | $ | 71.3 | $ | (23.5) | $ | 139.2 | $ | 210.5 | $ | (23.1) |
Payments for property and equipment | $ | (26.5) | $ | (11.0) | $ | (15.6) | $ | (42.1) | $ | (24.7) |
Free cash flow | $ | 44.8 | $ | (34.5) | $ | 123.6 | $ | 168.4 | $ | (47.8) |
Forward-Looking Statements
This news release includes forward-looking information and statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the Company's expectations or forecasts of business, operations, financial performance, cash flows, prospects, and other plans, intentions, expectations, estimates, and beliefs and include statements regarding the Company's guidance for 2024, growth opportunities and and the Company's positioning for the future. Words such as "expects", "continue", "will", "anticipates" and "intends" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the Company's current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein, including, without limitation, the risks discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our periodic reports subsequently filed with the United Sates Securities and Exchange Commission and in the Company's filings on https://www.sedarplus.ca/landingpage/ . Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof and, except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward looking information and statements herein, whether as a result of new information, future events or results, or otherwise.
About Trulieve
Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S., with leading market positions in Arizona , Florida , and Pennsylvania . Trulieve is poised for accelerated growth and expansion, building scale in retail and distribution in new and existing markets through its hub strategy. By providing innovative, high-quality products across its brand portfolio, Trulieve delivers optimal customer experiences and increases access to cannabis, helping patients and customers to live without limits. Trulieve is listed on the CSE under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF. For more information, please visit Trulieve.com .
Facebook: @Trulieve
Instagram: @Trulieve_
X: @Trulieve
Investor Contact
Christine Hersey , Vice President of Investor Relations
+1 (424) 202-0210
Christine.Hersey@Trulieve.com
Media Contact
Phil Buck , APR, Corporate Communications Manager
+1 (406) 370-6226
Philip.Buck@Trulieve.com
View original content to download multimedia: https://www.prnewswire.com/news-releases/trulieve-reports-second-quarter-2024-results-exceeding-quarterly-guidance-302215458.html
SOURCE Trulieve Cannabis Corp.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2024/06/c9137.html
News Provided by Canada Newswire via QuoteMedia
Adult Use Sales Launch Today at Beavercreek , Columbus , and Westerville Locations
Trulieve Cannabis Corp. (CSE: TRUL ) (OTCQX: TCNNF ) ("Trulieve" or "the Company"), a leading and top-performing cannabis company in the U.S., today announced it commemorated Ohio's adult use cannabis launch by reserving its first online order which was picked up at the Company's Westerville location this morning.
"We are proud to celebrate the launch of adult use sales in the Buckeye State alongside Ohioans who have been waiting for this day since last November," said Trulieve's Chief Executive Officer Kim Rivers . "We are thankful to our medical patients who have been with us since we entered Ohio , and we look forward to serving adult use customers as the state's cannabis market continues to grow."
The first adult use sale, purchased by Harrison Thee of Columbus , included flower, a vape cartridge, concentrate and edibles.
"I was impressed by the variety of products that are available," said Thee. "The whole process from start to finish was simple and easy, from placing my order online to picking it up at the dispensary, and the Trulieve staff was extremely knowledgeable and helpful."
Trulieve has three cannabis dispensaries in Ohio located at the following addresses:
Trulieve dispensaries offer customers a wide assortment of products featuring popular brands and accessible form factors including capsules, edibles, flower, tinctures and topicals.
For more information on store activations and locations in Ohio , please visit https://www.trulieve.com/dispensaries/ohio .
About Trulieve
Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S., with leading market positions in Arizona , Florida , and Pennsylvania . Trulieve is poised for accelerated growth and expansion, building scale in retail and distribution in new and existing markets through its hub strategy. By providing innovative, high-quality products across its brand portfolio, Trulieve delivers optimal customer experiences and increases access to cannabis, helping patients and customers to live without limits. Trulieve is listed on the CSE under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF. For more information, please visit Trulieve.com .
Facebook: @Trulieve
Instagram: @Trulieve_
X: @Trulieve
Investor Contact
Christine Hersey , Vice President of Investor Relations
+1 (424) 202-0210
Christine.Hersey@Trulieve.com
Media Contact
Phil Buck , APR, Corporate Communications Manager
+1 (406) 370-6226
Philip.Buck@Trulieve.com
View original content to download multimedia: https://www.prnewswire.com/news-releases/trulieve-commemorates-ohio-adult-use-launch-with-first-online-order-302214892.html
SOURCE Trulieve Cannabis Corp.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2024/06/c2634.html
News Provided by Canada Newswire via QuoteMedia
Adult Use Sales to Commence at Beavercreek , Columbus , and Westerville Locations
Trulieve Cannabis Corp. (CSE: TRUL ) (OTCQX: TCNNF ) ("Trulieve" or "the Company"), a leading and top-performing cannabis company in the U.S., today announced the upcoming launch of adult use sales on Tuesday, August 6 th at our dispensaries located in Beavercreek Columbus and Westerville .
"We are excited to be among the first group of operators to launch adult use sales in Ohio following a successful ballot initiative last year," said Trulieve's Chief Executive Officer Kim Rivers . "We are committed to maintaining excellent service standards for our existing medical patients while welcoming new adult use customers to our dispensaries."
Trulieve has three cannabis dispensaries in the state with locations as follows:
Trulieve dispensaries offer customers a wide assortment of products featuring popular brands and accessible form factors including capsules, edibles, flower, tinctures and topicals.
For more information on store activations and locations in Ohio , please visit https://www.trulieve.com/dispensaries/ohio .
About Trulieve
Trulieve is an industry leading, vertically integrated cannabis company and multi-state operator in the U.S., with leading market positions in Arizona , Florida , and Pennsylvania . Trulieve is poised for accelerated growth and expansion, building scale in retail and distribution in new and existing markets through its hub strategy. By providing innovative, high-quality products across its brand portfolio, Trulieve delivers optimal customer experiences and increases access to cannabis, helping patients and customers to live without limits. Trulieve is listed on the CSE under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF. For more information, please visit Trulieve.com .
Facebook: @Trulieve
Instagram: @Trulieve_
X: @Trulieve
Investor Contact
Christine Hersey , Vice President of Investor Relations
+1 (424) 202-0210
Christine.Hersey@Trulieve.com
Media Contact
Phil Buck , APR, Corporate Communications Manager
+1 (406) 370-6226
Philip.Buck@Trulieve.com
View original content to download multimedia: https://www.prnewswire.com/news-releases/trulieve-to-launch-adult-use-sales-in-ohio-on-tuesday-august-6th-302213642.html
SOURCE Trulieve Cannabis Corp.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2024/02/c6758.html
News Provided by Canada Newswire via QuoteMedia
Medicinal cannabis company ECS Botanics Holdings (ASX:ECS) published its latest quarterly report on Tuesday (July 30), detailing company achievements and strategic investments during the period.
The report highlights ECS' highest-ever harvest of 6.8 tonnes of biomass, up 62 percent year-on-year. The company attributes the increase mainly to outdoor production, and believes it will be able to compete better with cheaper imports.
A portion of the report also details the company’s progress in direct-to-consumer (B2C) sales, which began after ECS made a one year agreement with Elite Medical Solutions in May of this year.
The partnership offers automatic renewal options and guarantees a minimum annual order of AU$380,000, with anticipated growth. It will retail ECS’ soft gel capsules and oral liquids under ECS' military veteran’s brand, RAP.
The company expects to launch its AVANI rapid range of VESIsorb capsules by its first fiscal quarter of 2025.
"As a result of the B2C initiatives, the increase in exports and the addition product available for sale, we are anticipating strong revenue growth in the next quarter," ECS states in its press release.
The company also notes the recent completion of a propagation and genetics room, a space that will allow it to “provide sufficient clones for the expansion and breed genetics” best suited to ECS' growing conditions.
Nine new protective crop enclosures (PCE) have also been ordered to keep up with demand. ECS said these PCEs are expected to increase production of premium dried flower by over 200 percent once fully operational.
Finance-wise, ECS delivered revenue of AU$4.5 million for its fourth fiscal quarter of 2024. Compared to the year-ago period, the amount is slightly down from AU$4.8 million. The company explained that this is due to pricing pressure in the Australian market, while B2C sales and exports to Germany remain in the early stages of development. Still, the amount is a 12 percent increase from the prior quarter, when ECS' revenue came in at AU$4 million.
“Launching our B2C brand is a crucial step in capturing additional market share and increasing our revenue streams … Our investments in infrastructure, including the construction of new PCEs and the propagation and genetics room, ensure that we continue to provide the best possible product for patients,” said Managing Director Nan-Maree Schoerie.
"Our record production this quarter, culminating in 6.8 tonnes of untrimmed dried flower, showcases the strides ECS has made in enhancing our production and cultivation to the highest possible standard,” she continued. “These achievements are pivotal as we set up to meet surging demand in both local and export markets.”
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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