Cannabis Company 4Front Reports 28% YoY Drop In Q1 Revenue While Net Loss Grows, CEO Optimistic With Biden's Marijuana Rescheduling News

Vertically integrated multi-state operator (MSO) and cannabis retailer 4Front Ventures Corp. FFNT FFNTF announced its financial results on Friday for the quarter ended March 31, 2024.

“We’ve had an encouraging start to the year, energized by the fresh dynamics introduced with my recent appointment as CEO,” said the company's CEO Andrew Thut. “In just a few weeks, we’ve seen tangible improvements in our financial health, evidenced by reduced operational costs and effective management of working capital.”

See also: 4Front Ventures FY Revenue Drops 10% As Net Loss Increases, CEO Offers Optimistic Projections

Q1 2024 Financial Highlights

• Total revenues amounted to $18.8 million, down from $26.3 million in the prior year's period.
• Gross profit was $7.6 million, compared to $13.5 million in the first quarter of last year.
• Loss from continuing operations grew to $4.8 million from $1.4 million in the corresponding period of fiscal 2023.
• Selling, general and administrative expenses totaled $11.7 million down from $14.2 million in the same quarter of last year.
• Net loss attributable to shareholders totaled $18.4 million, up from $11.4 million in the prior year's period.
• Adjusted EBITDA (a non-GAAP measure) came in positive at $2.5 million, down from $5.9 million adjusted EBITDA gain in the prior year's period.
• As of March 31, 2024, the company had $2.9 million in cash and $66.1 million, with future debt maturities totaling $39.7 million.
• As of April 10, 2024, the company had 912,923,993 Class A subordinate voting shares and 1,276,208 Class C multiple voting shares outstanding.

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Other Quarterly Highlights

• Strengthened balance sheet with $23 million Conversion into equity;
• Continuing progress at Flagship Matteson, Illinois facility;
• Launch of New Marquee flower brand, Mission Cannabis, in Illinois and Massachusetts.

Outlook

Looking ahead, 4Front plans on launching its new cultivation and production facility in Matteson, Illinois and expanding its retail locations, Thut said.

In the meantime. President Joe Biden announced on Thursday that his administration is officially moving to reschedule marijuana under federal law.

"This change has profound legal and global implications, facilitates extensive medical research, and corrects historical injustices in cannabis-related law enforcement," Thut continued. "It also alleviates the heavy tax burdens and lowers the operational barriers imposed on legally operating state businesses."

FFNTF Price Action

4Front's shares traded 13.03% higher at $0.1310 per share after the market close on Thursday.