Chicago-based multi-state cannabis operator Verano Holdings Corp. (OTCQX:VRNOF) reported its financial results Wednesday for the second quarter ended June 30, 2024. The company disclosed revenues of $222 million, up 0.5% sequentially and meeting its guidance. On a year-over-year basis, revenue dropped 5%.
Financial results follow the company's announcement to acquire significant assets from The Cannabist Company Holdings Inc. (OTCQX:CBSTF). The acquisition, strategic to expanding its national footprint, includes one of Cannabist's Virginia licenses, along with associated operations including all operations in Arizona.
"Our second quarter performance was strong, highlighted by proactive measures we executed to further bolster the business, including authorization of a share repurchase program, capex investments, and subsequent to quarter end, strategic M&A that upon closure, will grant us vertical access to the Virginia market ahead of adult use," stated George Archos, Verano founder and chief executive officer.
"Looking ahead, we are prepared to leverage near-term catalysts including this week's launch of Ohio adult use sales, positive polling trends in Florida showing strengthening support of Amendment 3, ongoing adult use discussions in Pennsylvania, and continued rescheduling momentum at the federal level," Archos continued. "Adding Virginia to our portfolio and deepening our robust Arizona business also provides additional growth opportunities regardless of federal rescheduling timing and progress. We remain excited and confident in Verano's ability to continue driving long-term, sustainable growth throughout 2024 and beyond."
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Second Quarter 2024 Financial Highlights
- Gross profit amounted to $114.34 million or 51% of revenue, which compares to $115.19 million and 49% in the same quarter last year.
- Net loss was $(21.76) million or (10%) of revenue, compared to a net loss $(13.06) million in the corresponding period of 2023.
- Adjusted EBITDA was a gain of $70.59 million or 32% of revenue, which compares to adjusted EBITDA of $71.51 million in the second quarter of 2023.
- SG&A expenses reached $87 million or 39% of revenue, up from $85 million or 36% of revenue for the second quarter of 2023.
- Net cash provided by operating activities year to date was $39 million, down from $41 million for the prior year period.
- Capital expenditures year to date were $28 million, up from $17 million for the prior year period.
2024 Guidance
The company is not issuing guidance given the timing and uncertainties surrounding the closing of the pending acquisitions of The Cannabist Company's operations.
As of June 30, 2024, the Verano's assets were $358 million, including cash and cash equivalents of $130 million. The company had a working capital deficit of $(3) million and total debt, net of issuance costs, of $396 million.
Price Action
Verano shares closed Tuesday market session 0.35% higher at $3.41 per share.
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