Michigan Cannabis Co. Gage Growth Posts Q1 Revenue OF $17.6M, Up By 219.4% YoY

Michigan-based cannabis brand Gage Growth Corp. GAGE GAEGF posted Thursday its first-quarter financial results with revenue growth of 67.9% quarter-over-quarter and 219.4% year-over-year, respectively, reaching $17.6 million.

The increase in revenue could be attributed to new dispensaries and expanded cultivation capacity.

"After Gage's tremendous growth this quarter with revenue of $17.6 million, we expect our first half of 2021 revenue to exceed full fiscal year 2020 revenue and more than double the first half of fiscal year 2020,” Fabian Monaco, CEO of Gage stated. “We are rapidly growing as our investments in infrastructure have started to deliver operating leverage and the team continues to meet the evolving needs of our patients, customers and communities."

First-Quarter Earnings Highlights

• Gross profit amounted to $4.6 million, compared to $1.8 million in the previous quarter;
• Gage posted an adjusted EBITDA loss of $3.8 million, which compares to an adjusted EBITDA loss of $5.7 million in the fourth quarter of 2020;
• For the first three months of 2021, the company revealed a net loss of $10.8 million, compared to a net loss of $14.5 million;
• Gross margin was 26.1%, compared to 17.3% in one quarter earlier;
• At the end of the reporting period, Gage held $43.6 million in cash, compared to $45.5 million at the end of the previous quarter.

Q2 2021 Guidance

• Gage reaffirmed its second-quarter revenue projections of $26-$32 million.  
• It has also reiterated previously announced guidance of flower margins growth.

Operational Highlights And Future Plans

• Gage signed an off-take agreement to ensure up to 10,000 pounds of Gage and Cookies flower strains annually. This should expand the company’s flower offering and its margins with an affordable price per pound of $400.
• The company will open its 9^th dispensary in Jackson, Michigan on May 28^th, as part of its plan to open 20 stores by the end of the year.
• At the moment, Gage has eight operating cultivation facilities, compared to two in the same period of 2020. It is also working on a cultivation expansion that should be finalized in the last quarter of the year.
• Furthermore, the Detroit-headquartered cannabis company will likely establish a few more partnerships this year to broaden its total grow capacity to more than 7,000 pounds per month by the end of 2021.
• It expects to open a processing facility in the third quarter.

"Overall, we continue to execute on our growth strategy in 2021. We are excited to build on our momentum and are already seeing great performance evidenced by continued expansion of our retail and cultivation footprint,” Monaco concluded.

Price Action

Gage’s shares were trading 0.12% higher at $2.24 per share at the time of writing.

Image Credit: Matca Films