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Cannabis Stocks Earnings Season Starts This Week

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Source: Marijuana Moment

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis companies. July was a light month for reporting.

Tracker Rules

This data-driven, fact-based tracker will continually update based on new financial filings so that readers can stay up to date. Companies must file with the SEC or SEDAR and be current to be considered for inclusion. When we launched this resource in May 2019, companies with quarterly revenue in excess of US$2.5 million qualified. As the industry has scaled and as more companies have gone public, we have raised the minimum several times subsequently, including a move to US$5 million in October 2019, to US$7.5 million in June 2020, to US$10 million in November 2020 and US$12.5 million in August 2021. Due to the rapid growth in the cannabis industry, we raised the minimum to US$25 million (C$31.5 million) to qualify for what we now call the senior list and introduced a junior list with a minimum of US$12.5 million (C$15.6 million) in September 2021.

A Note About Adjusted Operating Income

In May 2019, we added an additional metric, “Adjusted Operating Income”, as we detailed in our newsletter. The calculation takes the reported operating income and adjusts it for any changes in the fair value of biological assets required under IFRS accounting. We believe that this adjustment improves comparability for the companies across IFRS and GAAP accounting. We note that often operating income can include one-time items like stock compensation, inventory write-downs or public listing expenses, and we recommend that readers understand how these non-cash items can impact quarterly financials. Many companies are moving from IFRS to U.S. GAAP accounting, which will reduce our need to make adjustments. Please note that our rankings include only actual reported revenue and not pro forma revenue. We also note that companies with non-cannabis operations must provide segment-level financial reports that detail not only revenue but also operating profit to be have their operating profit included in the tracker. Currently, Jazz Pharma (NASDAQ: JAZZ) and Tilray (TSX: TLRY) (NASDAQ: TLRY) aren’t providing this information.

Tracker Inclusion Updates

At the time of our last update on July 1, 38 companies qualified for inclusion on the senior list, including 31 filing in U.S. dollars and 7 in the Canadian currency. The junior list now includes 9 companies reporting in U.S. dollars and 6 in Canadian dollars. There were no additions or deletions during the month of July. On a combined basis, the Public Cannabis Company Revenue & Income Tracker now includes 53 companies.

We expect to add additional companies in the months ahead, and, due to pending or recently completed mergers, we anticipate some removals as well. We note that Intercure (TASE: INCR) (NASDAQ: INCR), which reports in the Israeli currency, qualifies for the junior list, but we haven’t yet added it due to its different reporting currency.

Included Companies That Reported in July

Since our last update in June, there have been no financials released by junior U.S. Dollar reporting companies that meet the criteria for the revenue tracker. Each of the other categories included at least one company reporting during the month.

Senior – American Dollar Reporting

Two companies reporting in American dollars released their financials during July: Tilray (NASDAQ: TLRY) (TSX: TLRY) and Turning Point Brands (NYSE: TPB). Tilray, which is down a lot in 2022, rallied after its Q4 financials and conference call. Cannabis revenue fell 3% sequentially and 1% from a year ago to $53.3 million. This represented only 35% of total revenue. The company used $20.5 million to fund operations and invested $22.5 million in capital expenditures during Q4. It took an impairment charge of more than $378 million as well. Its adjusted EBITDA fell 13% from a year ago. Turning Point Brands sunk after it reported, as the company saw a reduction in overall sales from a year ago of 16%, with net income plunging 65%. Its cannabis-focused operations, Zig-Zag, held up better.

Looking ahead to August, there will be a lot of financial reports. The largest companies by revenue expected to report include Trulieve (OTC: TCNNF) (CSE: TRUL), Curaleaf (OTC: CURLF) (CSE: CURA), Green Thumb Industries (OTC: GTBIF) (CSE: GTII), Cresco Labs (OTC: CRLBF) (CSE: CL), Scotts Miracle-Gro (NYSE: SMG) and Verano Holdings (OTC: VRNOF) (CSE: VRNO). Each of these companies cleared a minimum of $200 million revenue in Q1.

According to Sentieo, analysts expect Trulieve, which hasn’t announced an exact date yet, to post revenue of $324 million, up 50% from the prior year, with help from the recent acquisition of Harvest Health and Recreation from last October. Adjusted EBITDA is expected to increase 13% to $108 million. Curaleaf, which reports on the 8th, is expected to generate revenue of $337 million, up 8% from a year ago, with adjusted EBITDA flat at $85 million. GTI is expected to post revenue of $249 million, up 12%, when they report on the 3rd. Adjusted EBITDA is projected to fall 6% to $74 million.

Cresco Labs is expected to have generated revenue growth of 4% t0 $219 million, with adjusted EBITDA forecast by the analysts to grow by 14% to $52 million. Scotts Miracle-Gro overall revenue is projected to have dropped 24% during its fiscal Q3 to $1.23 billion, with adjusted EBITDA shrinking 50% to $179 million. The company will report on the 3rd. Verano, which announced that it is restating its prior financials, is expected to grow revenue by 10% from a year ago to $220 million. Adjusted EBITDA is expected to more than triple to $83 million. The company has a call scheduled for the 16th.

Senior – Canadian Dollar Reporting

Organigram (NASDAQ: OGI) (TSX: OGI), which reports in CAD, released their financials during the month. The company continues to make a lot of progress on its revenue, which increased 20% sequentially and 88% from a year ago during its fiscal Q3 to C$38.1 million. Despite a low use of cash, high net-cash with limited debt and continued strong growth expected by the analysts, the stock trades at tangible book value.

In August, we are expecting a report from Canopy Growth (NASDAQ: CGC) (TSX: WEED) on Friday, August 5th. Analysts project the company will generate revenue in its Q1 of $C$113 million, down 17% from a year ago, according to Sentieo. The company is expected by analysts to have an adjusted EBITDA loss of C$75 million.

Junior – Canadian Dollar Reporting

The Valens Company (NASDAQ: VLNS) (TSX: VLNS) reported its Q2 for fiscal year 2022, continuing to lead the Junior names in Canada. Revenue, up 28%, was boosted by the substantial M&A conducted by the company. The company reported debt of C$40 million with cash of C$24.9 million. It used about C$20 million to fund its operations in Q2. Product sales made up 87% of overall revenue

Stay up to date

Visit the Public Cannabis Company Revenue Tracker to track and explore the complete list of qualifying companies. We have recently created a way for our readers to access our library of Revenue Tracker articles. For our readers who are interested in staying on top of scheduled earnings calls in the sector, we have created and continually update the Cannabis Investor Earnings Conference Call Calendar.


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