TILT Holdings Cannabis Revenue Improves 31% To $10M, Teams Up With Shinnecock Indian Nation To Reach NY Market

TILT Holdings Inc. TILT TLLTF reported its financial and operating results

Tuesday for the second quarter and announced a new partnership with the Shinnecock Indian Nation to establish vertical cannabis operations on their tribal territory in the Hamptons. Shinnecock is a federally recognized Native American tribe living on their traditional lands on Long Island, N.Y.,

Q2 2021 Financial Summary (vs. Q2 2020, where applicable)

• Revenue increased 33% to $48.5 million driven by growth in both cannabis and inhalation and accessory revenue. Cannabis revenue increased 31% to $10 million and inhalation and accessory revenue increased 34% to $38.5 million.
• Gross profit before fair value adjustments increased 25% to $13.1 million or 27% of revenue, compared to $10.5 million or 28.9% of revenue.
• Adjusted EBITDA was up 2.7x to $6.5 million compared to $2.4 million.
• As of June 30, 2021, cash and cash equivalents had increased 29% to $9.6 million compared to $7.4 million at December 31, 2020.

Q2 2021 Operational Highlights

• TILT’s inhalation and accessory business generated record monthly sales in April.
• Generated record quarterly flower sales in Pennsylvania.
• Launched exclusive partnership with Old Pal to bring select products to Massachusetts.
• Expanded exclusive partnership with Airo Brands to bring select products to Pennsylvania.
• Secured local approval by the City Council of Brockton for adult-use cannabis sales at the Company’s Brockton dispensary.
• Appointed Gary Santo to CEO; Mark Scatterday continues serving as chairman of the board.

“We generated another quarter of record results by continuing to execute our B2B strategy and driving synergies across our business segments,” Gary Santo, CEO of TILT stated. “Our ability to cross-sell and deepen relationships with our 700+ customer base is materializing in the numbers. In fact, at the end of last year, 20% of our revenue was generated by our customers leveraging services across our cannabis inhalation and accessory businesses. By the end of Q2, that number increased to over 30%, which tells us that our strategy is working."

Historic Partnership With Shinnecock Indian Nation

TILT and the Shinnecock Nation will cooperatively build and operate cannabis cultivation, processing, dispensaries and consumption lounge facilities on Long Island.

Through a joint venture with the Nation’s cannabis project development firm Conor Green, TILT will finance, build and provide management services for the vertical cannabis operations of the Shinnecock Nation’s wholly-owned cannabis business, Little Beach Harvest.

The combination of TILT’s cannabis industry expertise with Shinnecock’s long history of understanding and use of plant medicine for healing will serve as the foundation of a truly unique and socially equitable partnership in the cannabis industry.

 “This is an exciting and momentous opportunity for our Nation,” Chenae Bullock, member of the Shinnecock Nation and Managing Director of Little Beach Harvest said. “As the wealth gap in the U.S. has grown wider and wider, it is economic development opportunities like this that will help our tribe bridge the gap. Through our partnership with TILT, we will not only create dozens of jobs and jump start careers, but will also cultivate business relationships with other tribal business owners, generating growth for Indigenous communities."

Transaction & Financial Highlights

A subsidiary of TILT has purchased 100% of the Class A membership interests of Standard Farms New York, LLC (“SFNY”) which will hold a 75% interest in a joint venture with Conor Green for approximately $700,000, in cash and stock, with up to $2.65 million to be paid in additional shares priced at the time of closing, to be issued upon achievement of certain milestones, including the commencement of retail and wholesale cannabis sales.

Price Action

TILT’s shares closed Tuesday market session 3.72% higher at 50 cents per share.