4Front Cannabis Co Shows Strong Performance In Sales In Q1 2021, Exceeds 'All Internal Expectations'

Vertically integrated cannabis company 4Front Ventures Corp. FFNT FFNTF revealed Monday its systemwide pro forma revenue (a non-GAAP measure) increased 26% sequentially to $31.4 million in the first quarter of 2021.

In addition, GAAP-reported revenue amounted to $23 million.

The Phoenix, Arizona-based company also reported that adjusted EBITDA (a non-GAAP measure) came in positive at $5.9 million, representing an adjusted EBITDA margin of 19%.

The company showed strong performance in sales and product adoption as it continues to expand its presence in California, Massachusetts, and Illinois.

"Continued positive momentum following the initiation of adult-use sales in late 2020 in both Georgetown and Worcester, Massachusetts, along with an exceptionally strong launch of our Calumet City, Illinois dispensary in December, contributed to our robust sequential Q1 sales increases and exceeded all internal expectations," Leo Gontmakher, the company's CEO, said.

The company expects to generate between $170 million and $180 million in pro forma systemwide revenue in 2021, with a positive adjusted EBITDA ranging between $40 million and $50 million.

"With revenue-generating operations now in California, Illinois, Massachusetts, Michigan, and Washington, we are poised to further scale the business according to our expansion strategy for 2021," Gontmakher added.

Q1 2021 Financial Highlights

• Gross profit totaled $13.9 million, versus some $8 million in the corresponding quarter of 2020.
• Total operating expenses amounted to $13.5 million, compared to $14 million in the first quarter of last year.
• Net loss for the period was $11.08 million, versus $8.65 million in the same period of the prior year.
• As of March 31, the company had roughly $209 million in total assets.

Q1 2021 Operational Milestones

In January, 4Front was given the green light to kick off the construction of its new Mission branded dispensary – third in Massachusetts – after receiving the Brookline, Massachusetts Planning Board's approval for the construction works. The store is poised to open in June or once it gets the Cannabis Control Commission's approval.

In the meantime, the company's manufacturing facility in Commerce, California – which spans 170,000 square feet – is nearly completed and expects to begin operations in the second quarter of 2021. In addition, 4Front also teamed up with a wholesale cannabis distributor Nabis over the quarter.

Photo by Kym MacKinnon on Unsplash