Red White & Bloom Cannabis Shares Slightly Down After Drop In Q1 2021 Revenue

Cannabis company Red White & Bloom Brands Inc. RWB RWBYF reported its financial results Tuesday for the first quarter of 2021, just days after revealing its revenue spiked 158% sequentially to $15.7 million in the last three months of 2020.

While the fourth quarter of 2020 was the first full quarter post and completion of its Platinum Vape acquisition, which resulted in higher quarterly revenue, company chairman and CEO Brad Rogers said that RWB “continued to see strong traction for our brands,” during the first three months of 2021, calling it “another great quarter.” 

Q1 Financial Highlights

Adjusted sales for the first quarter amounted to $32.7 million, representing a sequential increase of 14.5% from the previous quarter.

In addition, revenue for the first three months of 2021 totaled $11.8 million compared to $15.7 million in the last three months of last year.

RWB, based in Toronto, attributed the decline in revenue to how the company recognizes revenue under IFRS in the state of Michigan for its Platinum Vape branded product sales and a decrease of approximately $1 million due to a stronger Canadian dollar over the fourth quarter of 2020.

In the meantime, product sales in Michigan – where the company utilizes a 3rd party licensee - increased by 18% during the period.

Currently, the revenue RWB can recognize is product sales less inventory purchases and direct expenses in Michigan until it becomes fully licensed.

“We are building on that momentum and working towards finalizing our revised asset purchase of our Michigan investee to bring their revenue, as well as adjusted sales into IFRS revenue format before the end of this current quarter,” Rogers explained.

Apart from the $35 million worth of acquisition of Platinum Vape, which is licensed in California, and with products available across Michigan and Oklahoma, the company also funded $75 million to PharmaCo, a Michigan-headquartered cannabis company with 18 dispensaries and several growing facilities in 2020.

In Illinois, the company is ramping up its footprint with the previously completed acquisition of Mid-American Growers that run 3.6 million sq. ft. glass greenhouse in Illinois.

“Once complete, and the expansion of our Florida operations come on stream, we can finally report in our quarterly results the strength of what we have built and accomplished thus far,” Rogers added.

Price Action

Red White & Bloom Brands’ shares were trading 3.97% lower at $0.87 per share at the time of writing Tuesday morning.

Photo: Courtesy of Esteban Lopez on Unsplash