TILT Holdings Reports Record Quarterly Revenue Of $53.4M, Up 37% YoY; Revises Adjusted EBITDA Guidance

Marijuana company TILT Holdings Inc. TILT TLLTF released its financial and operating results late Monday for the three months ended September 30, 2021, reporting revenue of $53.4 million, up by 37% from the same quarter of 2020.

 Q3 2021 Financial Summary (vs. Q3 2020, where applicable)

• Cannabis revenue increased 19% to $11.2 million and inhalation and accessory revenue increased 42% to $42.1 million.
• Gross profit before fair value adjustments increased to $12.7 million or 23.7% of revenue, compared to $12.2 million or 31.3% of revenue. Gross margins were impacted by higher freight costs for the company’s inhalation and accessory business, as well as ramping up cultivation in the company’s cannabis business.
• Total operating expense was $16.3 million compared to $14.5 million.
• Adjusted EBITDA was $5.0 million compared to $5.1 million. As a percentage of revenue, adjusted EBITDA was 9.3% compared to 13.1%.
• On September 30, 2021, cash and cash equivalents were $6.7 million compared to $7.4 million on December 31, 2020. Working capital increased to $64.9 million compared to $57.4 million on December 31, 2020.

Q3 2021 Operational Highlights

• Received approval to commence medical retail sales at the company’s Brockton, Massachusetts dispensary; grand opening took place in October.
• Announced partnership with the Shinnecock Indian Nation to enter New York’s cannabis market.
• Expanded partnership with Old Pal to bring select products to market in Pennsylvania.
• Announced partnership with 1906 to launch various products in three key markets: Massachusetts, Pennsylvania and Ohio.

“TILT’s B2B strategy originated from our belief that the rising supply of wholesale cannabis in multiple markets across the U.S. would require a differentiated approach, shifting away from bulk flower sales towards branded packaged goods,” Gary Santo, CEO of TILT stated. “When we launched our strategy at the start of the year, we envisioned that marketplace transition would take 12 to 18 months as new cultivation came online. In the third quarter, we saw that timeline accelerate along with macro-economic pressure impacting consumers.”

2021 Guidance

The company reiterated its 2021 revenue guidance of $205-$210 million, expecting to come in at the lower end of the range primarily as a result of unexpected delays in obtaining new product approvals in Pennsylvania. This, coupled with higher freight costs associated with the Company’s inhalation and accessories business and expanding cultivation in Massachusetts, has resulted in the company revising its 2021 adjusted EBITDA outlook to range between $24-$26 million, representing a 42%-54% increase compared to 2020.

Price Action 

TILT’s shares closed Monday market session 3.63% higher at 42 cents per share. 

Photo: Courtesy of Kym MacKinnon on Unsplash