Grove Inc. Announces 156% Revenue Growth Despite Difficult Reported Quarter For Cannabis Industry

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Grove Inc. GRVI announced earnings and growth in its second-quarter ending on Dec 31 even as the hemp manufacturer faced decreasing momentum toward federal legalization and severe supply chain disruptions. 

With recent acquisitions starting to bear fruit and new acquisitions planned for the year ahead, the company is optimistic it can also pull off similar growth in 2022. 

The transition from a Trump administration to a Biden administration was seen as a sign that federal legalization was imminent, sparking a flurry of enthusiasm around the cannabis industry in early 2021, but that investor interest has stagnated in recent months. 

On top of stalled progress on the Secure and Fair Enforcement (SAFE) Banking Act in Congress, an onslaught of new COVID variants and labor shortages fueled a ripple effect of supply-chain disruptions that brought resource shortages, higher costs for raw materials, and other challenges that made the end of 2021 a challenging time for companies across the cannabis industry. Grove conquered supply chain issues as well as diversified into new verticals aside from hemp to bring in new revenue streams.  

Entry Into Amazon Aggregation Market Helped Grove Diversify Revenue Streams

Those challenging market conditions didn’t slow everyone down, though. Hemp manufacturer Grove posted record growth with $10.7 million in revenue for its second quarter, representing a 156% increase over the same quarter in 2020 and raising its revenues over $19 million.

That increased revenue was, in part, from the Upexi Amazon Aggregation division the company launched in October. The division seeks out promising Amazon.com Inc. AMZN and e-commerce businesses to buy and scale. In November, it added a “fund your brand” alternative to Upexi’s acquisition efforts. The alternative option offers funding and assistance to growing brands that want to partner with Grove but don’t want to sell their brand outright.

Grove Gearing Up For New Acquisitions And Initiatives In 2022?

Some of the company’s increasing cash flow went to an all-cash purchase of 30,000-square-foot distribution and sales center in Clearwater, Florida, last month. Grove hopes to see an increase in capacity and sales as well as the ability to add new services for its white label clients. 

It’s also using that cash flow to acquire new brands through its Upexi division, where it receives multiple submissions every week from growing brands looking to be purchased. As its brand portfolio continues to grow in 2022, Grove hopes to see its revenue streams increase with it.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.