Schwazze Announces Record Quarterly Revenue And Adjusted EBITDA In Q3 Report

Medicine Man Technologies Inc. operating as Schwazze, SHWZ SHWZ announced its financial results on Wednesday for the third quarter that ended September 30, 2022.

Q3 2022 Financial Highlights 

• Revenue Increased 36% to $43.2 million compared to $31.8 Million in Q3 2021.
• Nine Month Revenue Increased 46% to $119.2 Million Compared to $81.9 million.
• Adjusted EBITDA of $15.9 million, 36.7% of Revenue Nine Month Adjusted EBITDA of $38.7 million, 32.5% of Revenue.
• Retail sales were $39.8 million up 92% to $20.7 million when compared to Q3 2021.
• Gross Margin of $26.0 million, 60.1% of revenue, compared to $15.1 million and 47.3% of revenue in Q3 2021. Net Income was $1.8 million compared to a Net Income of $1.0 million for the same period last year.
• Adjusted EBITDA of $15.9 million was 36.7% of revenue, compared to $8.8 million for the same period last year.

“Since December 2021, Schwazze has closed acquisitions adding 15 cannabis dispensaries, 10 in New Mexico and five in Colorado as well as four cultivation facilities in New Mexico and one in Colorado and one manufacturing asset in New Mexico. This year Schwazze has opened two new dispensaries in New Mexico. This brings our total dispensary count to 35 between Colorado and New Mexico,” stated the firm in a press release.

"I am proud of the entire Schwazze team, and I would like to thank them for their hard work this past quarter and year. Despite a challenging economic backdrop, we outperformed our markets in Colorado by 12%. We've worked hard to continue to grow our market share, increase our profitability rate and generate free cash flow from operations, after paying taxes and CAPEX, placing us in an exclusive club within the cannabis sector,” said Justin Dye, chairman and CEO of Schwazze. “This is proof point that we are well on our way to building Schwazze into a unique regional powerhouse. I believe our distinctive operating capabilities, applied to attractive growth opportunities within our sector, will reward our shareholders with attractive risk-adjusted returns. The potential of favorable regulatory reform in the near-term would obviously accelerate and amplify those returns."

2022 Guidance

The Company is providing guidance for the fiscal year. FY 2022 revenue is projected to be $155 million to $165 million, and the FY 2022 adjusted EBITDA is projected to be from $51 million to $56 million.

"We are on target to deliver the lower end of the range for adjusted EBITDA which was a fourth-quarter annualized run-rate of $60-72 million dollars. We expect to be slightly below the projected revenues which were a fourth-quarter annualized run-rate of $175 million to $200 million. This lower-than-expected revenue in Q4 is due to lower-than-expected wholesale sales, and construction delays in new store openings in New Mexico," per the release. 

The company generated $4 million in cash from operations in the third quarter and expects to generate positive cash flow before acquisitions for the year.

Price check: Schwazze shares were trading down 1.41% at $1.22 per share during the PreMarket at the time of this writing Thursday morning.

Giorgio Trovato On Unsplash.