Shwazze Q3 Revenue Grows 328.4% YoY To $31.8M; Updates Guidance Following Recent Acquisitions

Schwazze, SHWZ announced financial results Monday for its third quarter, reporting revenues of $31.8 million, up by 328.4% from the same period year ago.

Financial Summary for Q3 2021:

• Gross margin of $15.1 million was 441.3%, better than Q3 2020 and 103 bps over Q2 2021
• Adjusted EBITDA of $8.8 million was 27.6% of revenue, compared to a loss of ($0.8) million in Q3 2020.
• Net income was $1.0 million or $0.02 diluted earnings per share compared to a net loss in Q3 2020 of ($2.9) million or ($0.7) diluted net loss per share.
• Cash flow from operations for the nine-month period was $4.8 million
• Same-store sales for the quarter of the seventeen Star Buds dispensaries when compared to last year were $20.7M up 1%.

Third Quarter Operational Highlights 

• Acquisition of Southern Colorado Growers, which includes 34 acres of land with outdoor cultivation capacity, as well as indoor, greenhouse and hoop house cultivation facilities and equipment;
• Launched Star Buds Home Delivery to residences in the city of Aurora on August 19, 2021;
• Acquisition of Brow 2, LLC that includes a 37,000 square foot building (27,000 square feet of canopy) for indoor cultivation and equipment;

Acquisition of Smoking Gun cannabis dispensary and assets for $4M in cash and 1,000 shares;

• The dispensary and assets are located on a prime corner on Colorado Boulevard in Glendale, Colorado in the center of the greater Denver area;

 "We continue to realize strong growth revenue quarter over quarter along with adjusted EBITDA results and to aggressively execute our growth strategy for Colorado," Justin Dye, CEO of Schwazze stated. "In this quarter we announced the acquisitions of Southern Colorado Growers, Brow 2 and Smoking Gun, bringing our announced dispensaries to 20 and significantly increased our cultivation capabilities. Wholesale results, led by PurpleBee's distillate also had another excellent sales quarter. Our retail results continue to outpace Colorado by 11.5%. I'm pleased to report that our average basket size for the quarter was up 7.3%, and although customer visits decreased by 5.8%, due to cycling through COVID impacts in the third quarter, year-to-date customer visits were up by 5.1%."   

2021 Guidance

The company has updated its 2021 guidance which excludes transactions that are announced but not closed. Annual revenue guidance is $110 million to $115 million and projected annual adjusted EBITDA from $32 million to $34 million. 

Price Action 

Schwazze’s shares closed Monday market session 1.83% higher at $2.22 per share. 

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash