The Parent Company: 3Q Financial Results, Cannabis Shops Tripled, Serve 80% of California Consumers

TPCO Holding Corp., doing business as The Parent Company GRAM GRAMF, announced its financial results late Monday for the third quarter ended September 30.

Q3 2021 Financial Highlights

• Net sales for the third quarter of 2021 were $39.7 million. 

• Gross profit for the period was $6.1 million, or 15% of net sales. 

• Adjusted EBITDA loss for the third quarter was $16.2 million.

• Cash and equivalents totaled $206.7 million as of September 30, 2021, $49.2 million cash was used for acquisitions and capital investment since closing Qualifying Transactions.

• Q3 2021 Financial Results

• Net sales in the third quarter of 2021 were $39.7 million, representing a decrease of approximately 26.7% compared to the second-quarter 2021 revenue of approximately $54.2 million.

• Consumer revenue grew sequentially 7.6% in the third quart of 2021, to $12.8 million, compared to $11.9 million in the previous quarter of 2021.

• Primarily due to the decrease in whole flower pricing during the third quarter of 2021, wholesale revenue was $26.9 million compared to $42.3 million in the second quarter of 2021.

• Gross profit in the third quarter of 2021 was $6.1 million, representing a gross margin of 15%, despite lower total sales gross profit improved by $1.3 million sequentially.

• Operating expenses were $31.6 million, cash expenses included general and administrative costs of $9.9 million, salaries and benefits of $9 million, and sales and marketing expenses of $4.6 million.

• Non-cash expenses included stock-based compensation of $3.6 million and depreciation & amortization of $3.3 million.

• Cash and cash equivalents totaled $206.7 million as of September 30, 2021.

"Over the last several quarters we have executed on our strategic initiative to drive growth in the higher quality, direct-to-consumer revenue we generate by expanding our coverage in the California market through our omnichannel platform," said Troy Datcher, CEO of The Parent Company.

"My focus since joining in September has been on accelerating the pace of our in-state expansion, increasing our operational efficiencies, and attracting talent to further strengthen our team. Our store presence has more than tripled since the beginning of 2021, now at over 80% coverage of the States adult population, we believe there is a significant opportunity for us to emerge as the preferred choice for California consumers looking to access high-quality cannabis products which continue to command a higher price point in the market," added Datcher.

“During the quarter we made our first investments from our Social Equity Ventures program, with Josephine and Billie's recently opening their dispensary doors in Los Angeles and the Peakz brand performing well through both our in-store and online shopping options,” Datcher concluded.

Price Action

The Parent Co. stock traded 6.91% lower at $3.10 per share at the time of writing Monday evening.