💸 High Impact

Verano Earnings Are Out

The What - Verano Holdings Corp. released its Q2 2024 financial results, showcasing steady performance despite facing a challenging market environment. Revenue for the second quarter was $222 million, marking a 0.5% increase from the previous quarter but a 5% decrease year-over-year. The decline was primarily driven by competitive pressures in New Jersey, offset partially by gains in Maryland and Connecticut.

The company reported a gross profit of $114 million, representing 51% of revenue, slightly up from 49% in Q2 2023. This improvement in gross margin was driven by increased contributions from net wholesale revenue despite the overall revenue decline. SG&A expenses were $87 million, constituting 39% of revenue, up from 36% in the previous year, reflecting increased costs associated with new store openings and higher salaries.

Verano's net loss for the quarter was $22 million, equating to 10% of revenue, compared to a net loss of $13 million in the same period last year. This increase was primarily due to a non-cash loss on debt extinguishment related to a $50 million prepayment under the company’s senior credit facility and slightly higher SG&A expenses.

Adjusted EBITDA for Q2 2024 was $71 million, or 32% of revenue, illustrating a slight sequential increase and a solid year-over-year growth. The company's ability to maintain a strong EBITDA margin amidst fluctuating revenues underscores its operational efficiency and effective cost management strategies.

Net cash provided by operating activities was $8 million for the quarter, contributing to a year-to-date total of $39 million, slightly down from $41 million in the prior year period. Capital expenditures year-to-date were $28 million, up from $17 million, reflecting the company’s continued investment in expanding its retail footprint and enhancing its operational capabilities.

Verano's balance sheet remains robust with current assets of $358 million, including $130 million in cash and cash equivalents as of June 30, 2024. Despite a working capital deficit of $3 million, the company’s strategic investments and ongoing capital projects are poised to drive long-term growth.

The company also announced several operational highlights, including the opening of new dispensaries in Florida, Connecticut, and Pennsylvania, expanding its total retail locations to 142 across 13 states. Verano launched the Cabbage Club™, a proprietary multi-state cannabis membership program, and entered into strategic agreements to acquire operations in Virginia and Arizona, positioning the company for future market expansions.

The Numbers

• $222M REV; EST. $225M

• $71M AEBITDA; EST. $68M

• $114.3M GP; EST. $114.4M

• $27.3 M OI; EST. $26.9M

• 51% GM; EST. 50.8%

• ($ 21.7M) NI; EST. ($17.3M)

📈 Dog Walkers

New Hampshite Makes Major Move To Expand Medical Market

New Hampshire Governor Chris Sununu signed Senate Bill 357 and House Bill 1278, significantly expanding the state's medical cannabis program. SB 357 allows more healthcare professionals to recommend cannabis, while HB 1278 gives providers broad discretion to prescribe it for any condition they believe cannabis could help. This move is expected to boost the number of registered patients beyond the current 13,000, despite the state's limited medical cannabis dispensaries and lack of an adult-use market.

Healing REIT Inks Major Partnerships

Healing Realty Trust (HRT) is making waves by entering Preferred Real Estate Partnership Agreements in Florida, Massachusetts, and Arizona. This move will expand their portfolio with clinic-focused properties, enhancing access to mental, behavioral, and physical health treatments, including psychedelic therapies. Fresh off a $25 million Series A funding round, HRT acquired three healthcare facilities in Texas, Ohio, and Connecticut. Partnering with NeuroSpa, Cambridge Biotherapies, and Cathexis, HRT is set to revolutionize healthcare real estate, tapping into a market projected to hit $136.6 billion by 2032.

Trulieve Posted A Banger Quarter

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) crushed it in Q2 2024, posting $303 million in revenue—up 8% year-over-year and 2% sequentially. Trulieve’s EBITDA hit $88 million, with adjusted EBITDA at $107 million, showing a 36% year-over-year surge. With $356 million in cash and strategic expansions, Trulieve is set for continued growth.

Earnings Release

🗞️ The News

Verano Announces Second Quarter 2024 Financial Results

AYR Wellness Reports Second Quarter 2024 Results

Trulieve Reports Second Quarter 2024 Results Exceeding Quarterly Guidance

Healing Realty Trust Enhances Clinic-Focused Portfolio With 3 Major Partnerships

GOP Ohio Lawmaker Among First To Buy Legal Marijuana As Market Launches, Choosing Willie Nelson Brand

Where Vice Presidential Candidate Tim Walz Stands On Marijuana

📭 Research

Initiating Coverage: Green Thumb Industries - Download Here

Reconfirming Buy Rating: MariMed - Download Here

Initiating Coverage Of Verano Holdings Corp. - Download Here

Initiating Coverage: TerrAscend - Download Here

📺 YouTube

Rare Cannabinoids Are A Major Trend Amongst MSOs | Trade to Black

What we covered:

✅ On our latest "Trade to Black" podcast with Shadd Dales. How much are MSO companies implementing a rare cannabinoid strategy into their business plans moving forward? Which CPG companies are currently reviewing the space, and how eager are they to enter it?

Jerry Griffin from BayMedica, a subsidiary of InMed Pharmaceuticals (NASDAQ: INM), and Micah Hogan, VP of Sales and Marketing at FloraWorks, will join us to shed light on the cannabis industry.

BayMedica, an industry leader in rare cannabinoid manufacturing, specializes in developing cannabinoids for leading MSO companies, with edible brands like Wylde, Gron, and Wanna Brands. FloraWorks is a top cannabinoid research company.