It’s Earnings Season For The Cannabis Sector And You Need To Read This!!!

During the last month, several cannabis stocks have reported quarterly financial results and these announcements have been significant.

Several companies we cover have reported much lower revenue than they did in the same period last year and we consider this to be a bearish indicator.

Today, we have covered three companies that have recently reported earnings and have provided some highlights from each release.

GrowGeneration Corp.

Earlier this month, GrowGeneration Corp. (Nasdaq: GRWG) announced financial results for the fourth quarter and the stock has been under pressure since the release. Some key takeaways from the earnings report include:

1. When compared to the same period last year, net revenue decreased by approximately 40% and same-store sales decreased by more than 50%
2. During the quarter, GrowGeneration reported negative $10.2 million of adjusted EBITDA. This is considerably higher than what was reported in the same period last year
3. As of December 31^st, the company had $71.9 million of cash and short-term securities

HEXO Corp

A few weeks ago, HEXO Corp. (TSX: HEXO) (NASDAQ: HEXO) reported second quarter financial results and we remain on the sidelines with the Canadian cannabis company. Some important takeaways from the earnings report include:

1. When compared to the same period last year, net revenue fell by a massive amount. Last year, HEXO reported more than $52 million of net revenue. This year, the company reported approx. $23 million of net revenue.
2. As of January 31^st, the Canadian cannabis company reported to have approx. $34 million of cash and cash equivalents
3. When compared to the prior quarter, the company reported a much larger adjusted EBITDA loss

High Tide Inc.

The next company we want to cover is High Tide Inc. (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA) which reported much stronger numbers in its earnings report (on a year-over-year basis). Some key takeaways from the report include:

1. During the quarter, the company generated $118.1 million of revenue which is 64% higher than what was reported in the same period last year.
2. Gross profit increased by approx. 40% on a year-over-year basis
3. Adjusted EBITDA increased by 86% on a year-over-year basis
4. As of January 31^st, the Canadian cannabis company reported to have approx. $24 million of cash on hand

If you are interested in learning more about cannabis earnings report, please send an email to support@technical420.com with the subject “Cannabis Earnings Reports” to be added to our distribution list.

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This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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