Cannabis Weekly Round-Up: Fresh Quarterly Results Highlight Market Struggles

American MSO Trulieve reports record revenue

Last week's biggest results in the cannabis market came from Florida-based multi-state operator (MSO) Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF). While its Q4 2022 revenue reached US$302 million, the company still posted a net loss of US$77 million.

In terms of the full-year period, revenue increased by 32 percent over 2021 to US$1.2 billion. However, the firm posted an annual generally accepted accounting principles net loss of US$246 million and an adjusted net less of US$30 million.

"In 2023, we are laser focused on cash generation while investing to build a sustainable company designed to thrive in an integrated commerce environment," Trulieve CEO Kim Rivers said.

In a note to clients, Haywood Capital Markets analyst Neal Gilmer lowered his Trulieve share price target from C$26 to C$22.

"A shifting of focus towards cash generation should position Trulieve to navigate near-term headwinds and execute on growth initiatives,” Gilmer wrote, according to a report from Cantech Letter.

Fellow cannabis operators post tough results

Ayr Wellness (CSE:AYR.A,OTCQX:AYRWF), a US-based MSO, and Village Farms International (NASDAQ:VFF), a Canadian farming company with a strong cannabis presence, also shared their most recent financial results.

The two cannabis operators faced difficulties in the open market following their lackluster releases.

Village Farms reported a net loss of US$49.3 million for Q4 2022. The company blamed this loss on a US$13.5 million impairment charge due to its acquisition of Balanced Health Botanicals. The company also struggled financially because of a writedown of US$11 million that it said was related to cannabis plants.

“During 2023, we expect strong commercial execution, continuous innovation and sales to export markets will deliver another year of market-leading results in our Canadian Cannabis business," Michael DeGiglio, CEO of Village Farms, said. "At the same time, we are focused on continued gains in production efficiencies and expense improvements.”

Total cannabis sales for the firm declined year-over-year by 2 percent to US$33.2 million

Ayr Wellness faced a difficult quarter leading to a tough year all around.

The company reported a net loss per share of $2.40 for its most recent quarter and $3.58 for the entire operating year.

David Goubert, president and CEO of Ayr, said the firm has stepped back from markets that didn't meet the needs of the company and is instead looking to solidify its position elsewhere.

"By better prioritizing our time, our attention, and our capital, we find ourselves better positioned to capture growth opportunities in our existing and future footprint, which we anticipate will help us grow our cash flow profile, our revenue, and adjusted EBITDA margins consistently throughout 2023,” Goubert said in a release.

Cannabis company news

• IM Cannabis (NASDAQ:IMCC,CSE:IMCC)announced a reorganization of its management and operations. The financial cost-cutting measures will remove between 20 and 25 percent of the company's workforce in Israel. "We expect approximately CAD$3.5 million of annualized cost savings from mid-2023, while maintaining our anticipated revenue," said Oren Shuster, CEO of IM Cannabis.

• Delta 9 Cannabis (TSX:DN,OTCQX:DLTNF)informed shareholders it has increased the efficiency of production at its Winnipeg facility thanks to the installation of a "new fully-automated pre-roll manufacturing equipment." The Canadian Agricultural Partnership AG Action Manitoba program helped the project by kicking in C$175,000, or approximately 25 percent of the cost.

• Acreage Holdings (CSE:ACRG.A.U,OTCQX:ACRHF)obtained an independent recommendation from advisory firm Glass Lewis suggesting its investors vote in favor of a proposed arrangement with Canopy Growth (NASDAQ:CGC,TSX:WEED) and Canopy USA. "We believe the proposed transaction represents an attractive outcome for Floating Shareholders which will receive an equity stake in Canopy at what we consider a fair exchange ratio," the review states.

• Akanda (NASDAQ:AKAN)confirmed the implementation of a one for 10 reverse stock split on its ordinary shares, effective on Thursday (March 9).