TILT Q2 Revenue Slightly Slides YoY, Saved By Growing Cannabis Operations

TILT Holdings Inc. TLLTF TILT Q2 2022 revenue was $47.1 million, a 2.88% decrease compared to $48.5 million in the prior year. The decrease in revenue was driven by lower sales volume and pricing for certain products in the company’s inhalation business, partially offset by more than 20% growth in the company’s cannabis operations.

Q2 2022 Financial Highlights

Gross profit was $10.9 million or approximately 23% of revenue, compared to $12.9 million or approximately 27% of revenue in the prior year.
Net Loss for the quarter was $7.1 million compared to a Net Income of $1.0 million in the prior year. The decrease was primarily due to the $6.7 million noncash goodwill impairment incurred in the quarter.
Adjusted EBITDA was $1.1 million compared to $7.1 million in the prior year.
Total cash balance at June 30, 2022 was $34.7 million compared to $7.0 million at December 31, 2021.
During the second quarter, the company completed a sale leaseback for its Massachusetts facility and signed a purchase and sale agreement for its Pennsylvania facility totaling $55 million. The Massachusetts transaction closed in May 16, 2022 and the Pennsylvania transaction is targeted for September 30, 2022.

Q2 2022 Operational Highlights

Launched Timeless, expanding its vaporization product footprint to patients in Ohio through a previously announced exclusive partnership.
Launched Infinity, Jupiter Research LLC’s proprietary vaporizer, featuring Commonwealth Alternative Care Inc. cold press and cured resin cannabis oils, in Massachusetts for both medical and recreational use.
Announced a new manufacturing and distribution partnership with Highsman, a purpose-driven cannabis lifestyle brand founded by former NFL running back, Ricky Williams.
Announced exclusive partnership with social impact driven brand, Black Buddha Cannabis, to launch products in both Massachusetts and Pennsylvania later this year.
Launched a partnership with Last Prisoner Project, a non-profit organization dedicated to facilitating clemency, expungement, and successful re-entries for individuals with cannabis convictions.
Received its final license from the Massachusetts Cannabis Control Commission for medical marijuana sales in the company’s Cambridge dispensary.

Recent Operational Highlights

Launched lifestyle cannabis brand Toast to both patients and adult-use consumers throughout Massachusetts at TILT subsidiary CAC’s locations in Taunton and Brockton, as well as wholesale dispensary partner locations.
Celebrated the Shinnecock Indian Nation and TILT breaking ground on Little Beach Harvest, a 5,000 square-foot cannabis dispensary located on Shinnecock tribal territory in Southampton, New York.

Gary Santo, CEO of TILT stated, “The foundation for TILT is set. Early results have shown that we have the right strategy in place and the right team to execute upon it. That said, we are committed to increasing our pace given market conditions, with even more brand partners and SKUs to launch across a larger operating footprint going forward. Together with a more competitive hardware portfolio, the launch of our medical dispensary in Cambridge, Massachusetts later this month and New York operations on the horizon, we will continue to scale our operations while generating positive cash flow to fund our business and growth objectives.”

2022 Financial Guidance

Due to the evolving macroeconomic environment, inflationary impacts on consumer spending, and lower cannabis wholesale pricing in Massachusetts and Pennsylvania, TILT is revising its 2022 financial outlook and now expects revenue to range between $205 – $210 million, with Adjusted EBITDA ranging between $10 – $15 million.

Photo by Richard T on Unsplash

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