Verano Q3 Revenue Jumps 105% To $207M, Adjusted EBITDA Reaches $111M

• Multi-state cannabis operator Verano Holdings Corp. VRNO VRNOF disclosed its results Tuesday for the third quarter ended September 30, 2021, reporting revenues of $207 million, compared to $101 million in the same period year ago. The Chicago, Illinois-based company noted that the reported financial data accounts for the AltMed acquisition as if completed on January 1, 2021.

Third Quarter 2021 Financial Summary

• Gross profit increased 33% sequentially on an unadjusted basis and excluding the impact of biological assets, to $133 million, or 64% of revenue, compared to $100 million or 50% of revenue reported in the second quarter of 2021.
• Third-quarter adjusted EBITDA was $111 million or 54% of revenue compared to $81 million or 41% of revenues in the prior quarter. Third-quarter EBITDA on an unadjusted basis was $107 million or 52% of revenues.
• SG&A expense was $32 million or 15% of revenue.
• Net income, including the impact of biological assets, was $104 million. Excluding the impact of biological assets, net income was $15 million in the third quarter of 2021, compared to $32 million reported in the second quarter of 2021.
• Cash flow from operations was $68 million and Free Cash Flow was $35 million.
• As of September 30, 2021, the company’s current assets on a consolidated basis were $629 million, including cash and cash equivalents of $57 million.

Third Quarter 2021 Operational Highlights

• In the third quarter, Verano further expanded its retail footprint with seven new dispensaries across its core markets in Florida, Ohio and Pennsylvania, including the first Zen Leaf storefront in Philadelphia and a flagship drive-through dispensary in Pittsburgh.
• As of the date of this earnings report, Verano has 89 operating dispensaries and 12 cultivation and production facilities. 
• The company closed its acquisitions of Agri-Kind and Agronomed.
• Verano maximized its retail footprint in Ohio at five dispensaries with the acquisition of Mad River Remedies in Dayton.
• The company announced the acquisition of Sierra Well.

Subsequent Operational Highlights

• Verano secured additional, non-dilutive liquidity to support further inorganic growth, upsizing its credit facility by $120 million while lowering its cost of capital.
• In November, the Company announced three accretive acquisitions in Connecticut, including two active dispensaries and one 217,000 square foot cultivation and a production facility.

Management Commentary

“Our third-quarter results demonstrated the Company’s fundamental strengths, highlighted by our industry-leading bottom-line performance that included $111 million in adjusted EBITDA, or 54% of revenue, and 33% sequential growth in gross profit,” George Archos, Verano CEO and founder stated. “We’ve expanded the Verano platform considerably, adding vertically integrated operations in Connecticut ahead of the adult-use transition and adding depth in Pennsylvania, Nevada, and Florida. We believe that we’re positioning the Company well for long-term topline growth while targeting a low-40s EBITDA margin profile heading into 2022 and beyond.”

Price Action 

Verano’s shares closed Monday market session 4.18% lower at $13.28 per share. 

Photo: Courtesy of Elsa Olofsson on Unsplash