Jay-Z-Backed The Parent Co. Revenue Grows 18.9% YoY To $54.2M In Second Quarter

TPCO Holding Corp. GRAM GRAMF, which does business as The Parent Company, announced its second-quarter financial results on Monday, revealing net sales of $54.2 million, representing approximately 18.9% growth compared to the adjusted Q1 2021 revenue of approximately $45.6 million.

The earnings release comes on the heels of the company’s appointment of Troy Datcher to serve as the Company's new CEO, effective Sept 8th. Datcher's historic appointment represents the first time a Black CEO will lead a major publicly traded U.S. cannabis organization.

Q2 2021 Financial Highlights

• Adjusting for a full year of sales beginning January 1, 2021, H1 2021 net sales would have been approximately $99.8 million;
• Gross profit in Q2 2021 was $8.1 million, representing a gross margin of 15% in Q2 2021;
• Adjusted EBITDA loss for Q2 2021 was $10.4 million, primarily attributable to the ongoing operations of the Company's core business;
• Operating expenses in Q2 2021 were $60.7 million, of which $31.8 million were non-cash expenses;
• Cash and cash equivalents totaled $257.5 million as of June 30, 2021, compared to $281.0 million as of March 31, 2021.

"We continue to execute on our consolidation and expansion initiatives to lead the California cannabis market," Steve Allan, CEO of The Parent Company said. "Through the acquisition of two new retail dispensaries, as well as our new distribution hubs in San Diego and Sacramento, and the recent opening of our newest dispensary in Hanford, we have made great progress in improving our state distribution reach, which is currently over 70%. This expanded state coverage enables us to scale our direct-to-consumer omnichannel platform, bringing products to market sooner and improving the accessibility of high-quality cannabis for California consumers."

Q2 2021 Operational Highlights

• Shawn 'JAY-Z' Carter's MONOGRAM challenges national drug policy and launches digital and out-of-home awareness campaign to magnify the hypocrisies of cannabis legislation;
• Launched Fun Uncle Cruisers – a disruptive entry into the value vape category – netting 3.5% CA market share by units in the first quarter of launch (BDSA Data April – June 2021)
• Over 23k consumers have enrolled in the Company's newly Launched (4/23) integrated loyalty program: Caliva CLUB;
• Signed a definitive agreement to acquire four acres of outdoor cultivation located in Sonoma County, CA from Mosaic.Ag, an affiliate of Soma Rosa Farms;
• Disposed of the Company's 34% minority interest in Half Moon Grow, as well the Company's Acai Puree business line;
• Entered into a definitive agreement to sell its hemp CBD business unit to Arcadia Biosciences, Inc.® RKDA for $4 million in cash and 827,400 shares of Arcadia stock;

Subsequent Events

• Expands California Retail Footprint through the acquisition of Calma, West Hollywood;
• Improved Value Vape Offering with Launch of Fun Uncle Cruisers Vapes With Live Resin;
• Opened a New Delivery Hub in San Diego Via Caliva's Direct-To-Consumer Platform;
• Launched First-Of-Its-Kind, Cannabis Mobile Shopping App Through Apple App Store to improve Cannabis Accessibility;
• Announced Voluntary Board of Director and Executive Team Lock-Up Agreements
• Strengthened its California Retail Footprint through the acquisition of Jayden's Journey in Ceres, California;
• Filed Form 10 registration statement with the United States Securities and Exchange Commission in advance of potentially being permitted to list the Common Shares and the Warrants on the New York Stock Exchange or the Nasdaq Stock Market.

Price Action

The Parent Company’s shares closed Monday market session 1.60% higher at $3.9 per share.

Photo: Courtesy of kevin hupfer on Unsplash