Cannabis Earnings Season Is Heating Up…

Earnings season is kicking into high gear for the cannabis sector and we consider this to be a pivotal time for the industry.

Over the next month, several large-scale North American cannabis companies are expected to report earnings. We believe our readers should be aware of these upcoming reports and we are especially interested in what Canopy Growth Corporation (Nasdaq: CGC) (TSX: WEED) will report.

Today, we highlighted three companies that have already released quarterly financial results and have provided important takeaways from the reports.

Organigram Holdings

A few weeks ago, Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) released first quarter financial results and the market responded favorably to the report. Today, we want to provide more information on Organigram’s earnings report and highlight 5 key takeaways from the quarter:

1. During the quarter, Organigram generated $43.3 million of revenue. This is considerably higher than the $30.4 million of revenue generated in the same period last year and we are favorable on the increase
2. In the first quarter, the company recorded a large increase in the amount of revenue that was generated by international markets (Australia and Israel). Going forward, we will monitor how this aspect of the business advances
3. Organigram generated positive adjusted EBITDA for the fourth consecutive quarter and we find this trend to be significant.
4. When compared to the same quarter last year, Organigram recorded a 12% increase in its adjusted gross margin. The management team attributed the increase to improved efficiencies and higher sales volume
5. As of November 30^th, the Canadian cannabis producer reported to have more than C$95 million of cash and short term investments.

Avant Brands

Avant Brands Inc. (TSX:AVNT)(OTCQX:AVTBF)(FRA:1BU0) recently reported preliminary fourth quarter results and recorded record numbers in several categories. Some important takeaways from the preliminary earnings report include:

1. The Canadian cannabis company anticipates reporting approx. $8.8 million of gross revenue (preliminary and are unaudited) for the fourth quarter. It expects to report $22.6 million of revenue for the entire year.
2. During the quarter, Avant Brands produced approximately 1,752 kilograms of cannabis and sold approximately 1,471 kilograms of cannabis
3. Avant Brands expanded in Canada and entered new provincial markets (i.e. Newfoundland and Labrador & Prince Edward Island).
4. During the year, the company completed 9 export shipments of approximately 1,284 kilograms of cannabis to Israel and Australia
5. Avant Brands is focused on expanding and entered into an agreement to acquire 100% of 3PL Ventures. Previously, the company owned 50% of 3PL and we will monitor how the transaction benefits the business.

Tilray Brands

In early January, Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) reported second quarter financial results and we believe the company has achieved several important milestones since its merger with Aphria in 2021. Some key takeaways from Tilray Brands’ earnings report include:

1. According to the earnings report, Tilray Brands has a leadership position in Canada with 8.3% cannabis market share.
2. Beverages was a major growth vertical for the cannabis company as sales increased 56% to $21.4 million (when compared to the same period last year). This amount included revenue from acquisitions
3. During the quarter, Tilray Brands generated $11.7 million of adjusted EBITDA. This marks the 15th consecutive quarter of positive adjusted EBITDA for the Canadian cannabis company.
4. So far, Tilray Brands has achieved $119.6 million in annualized cash cost-savings since the closing of the Aphria transaction in May 2021. This amount was approx. $108 million as of August 31, 2022.
5. As of November 30^th, Tilray Brands reported to have more than $430 million of cash, cash equivalents, and marketable securities.

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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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