Verano Q1 FY23 Revenue Grows 12% YoY Driven By Adult Use Cannabis Sales In New Jersey And Connecticut

Verano Holdings Corp. VRNOF VRNO revenue for the first quarter 2023 was $227 million, up 12% from $202 million for the first quarter 2022, and up 1% from $226 million for the fourth quarter 2022. The increase in revenue for the first quarter 2023 compared to the first quarter 2022 was driven primarily by strength from retail and wholesale adult use sales in New Jersey and Connecticut, slightly offset by retail declines in Pennsylvania.

Q1 2023 Financial Highlights

• Gross profit for the first quarter 2023 was $109 million or 48% of revenue, up from $99 million or 49% of revenue for the first quarter 2022, and up from $103 million or 46% of revenue for the fourth quarter 2022.

• Net loss for the first quarter 2023 was $9 million, versus $214,000 in the first quarter 2022, and $216 million for the fourth quarter 2022.

• Adjusted EBITDA for the first quarter 2023 was $71 million or 31% of revenue, down from $87 million or 43% of revenue for the first quarter 2022, and down from $79 million or 35% of revenue for the fourth quarter 2022.

“I’m very pleased with our first quarter results which validate the effectiveness of our strategy, highlighted by revenue growth, positive free cash flow and strong adjusted EBITDA margins,” stated George Archos, Verano founder, chairman and CEO. “Our results were bolstered by the launch of adult use sales in Connecticut, expanding our retail footprint across key markets, strengthening our portfolio to satisfy consumers’ evolving preferences, and delivering greater efficiencies that increased output across many key metrics. We remain confident in our ability to continue growing the business in a challenged environment, will closely monitor developments in Washington D.C. on the reintroduction of SAFE banking legislation, and look forward to leveraging our deep experience in transitioning markets as we approach the forthcoming launch of adult use sales in Maryland.”

2023 Guidance

The company reiterated its guidance of $50-75 million in free cash flow and tightened its range of capital expenditure guidance to $35-50 million.

Balance Sheet and Liquidity
As of March 31, 2023, the company’s current assets were $316 million, including cash and cash equivalents of $95 million. The company had a working capital deficit of $48 million and total debt, net of issuance costs, of $415 million.

The company’s total class A subordinate voting shares outstanding was 342.33 million as of March 31, 2023.

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