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🚨 We Have An Earnings Mixed Bag This Morning 🚨
Anthony Varrell
November 13, 2024
GM Everyone,
Jolly Old Saint Chris graced us with insight into the Trump administration's views on cannabis yesterday. These statements lit the wick for an aggressive dead cat bounce after we got our teeth kicked in over the last week since the election. Why did he decide to enter the conversation, you might ask? We have no idea. But he did.
Catch Michael DiGiglio on the stream today at 4pm to talk $VFF earnings.
A little longer than a 7 minute read.
💸 The Tape
iAnthus Capital's Q3 Results: A Mixed Bag in the Cannabis Garden
iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQB: ITHUF), the proud owner and operator of regulated cannabis ventures across the United States, has released its financial results for the third quarter ended September 30, 2024. Let's dive into the numbers and see what's budding—or wilting—in their financial garden.
Revenue Takes a Dip, But There's More to the Story
The company reported revenue of $40.3 million, marking a 6.3% sequential decrease from Q2 2024 and a 6.1% drop compared to the same quarter last year. It seems the green wasn't as lush this quarter, perhaps due to market saturation or those pesky regulatory weeds that tend to sprout unexpectedly.
Gross Profit Grows Like a Well-Tended Plant
On the brighter side, gross profit came in at $18.1 million—a 12.6% sequential decrease but a substantial 35.5% increase from the same quarter last year. The gross margin stood at 44.9%, down 323 basis points from Q2 2024 but up a hefty 1,377 basis points year-over-year.
Net Loss Narrows Compared to Last Year
The company reported a net loss of $11.6 million, or less than $0.01 per share. While this is a slight increase from the $9.8 million loss in Q2 2024, it's a significant improvement from the $19.2 million loss in the same quarter last year. Think of it as the difference between a drizzle and a downpour—still not ideal for a picnic, but you'll need a smaller umbrella.
Adjusted EBITDA: Not a High, But Not a Low Either
Adjusted EBITDA was $5.3 million, down from $8.9 million in Q2 2024 but up from a mere $0.8 million in the same quarter last year. For those keeping score, EBITDA and Adjusted EBITDA are non-GAAP measures—financial euphemisms that attempt to paint a rosier picture. It's like saying your garden is flourishing if you don't count the weeds.
What Does This Mean for Investors?
iAnthus is navigating a challenging market with the agility of a seasoned grower trimming a bonsai tree. While revenues have taken a hit, the substantial year-over-year improvement in gross profit and margins suggests that the company's cost management strategies are bearing fruit—or at least, budding.
However, the sequential declines indicate that iAnthus isn't completely out of the woods. Market pressures, regulatory hurdles, and increased competition continue to cast shadows over the cannabis industry's growth prospects.
Final Puff
iAnthus Capital's Q3 results are a mixed bag—much like a grab-bag from a dispensary that contains both your favorite strain and one you'd rather avoid. The company shows promise in improving profitability but still faces headwinds that could affect its growth trajectory. After all, in the fast-growing cannabis industry, today's seed could be tomorrow's towering plant—or it could fail to germinate altogether.
📈 Dog Walkers
AYR Wellness Reports
AYR Wellness Inc. is navigating the hazy landscape of the cannabis market with a mix of resilience and ambition. Interim CEO Steven M. Cohen isn't just holding the fort; he's planting seeds for 2025 growth. The company plans to expand in Ohio (because who wouldn't want more of that Midwest magic?), make a grand entrance in Virginia, and enhance operations in Florida. Sure, Amendment 3 didn't light up as hoped in the Sunshine State, but with a new indoor cultivation facility on the horizon, AYR is poised to keep things rolling. New dispensaries sprouting in Connecticut, Illinois, and additional Florida locations show AYR is high on future prospects.
High Tide Closese Final Tranche Of Facility
High Tide Inc. (Nasdaq: HITI) is making waves in the cannabis industry by closing the final $5 million tranche of its $15 million subordinated debt facility. Think of it as the company’s way of saying, "We’re open for business, and we're not just blowing smoke!" Issued at $900 per $1,000 principal amount, these debentures offer a hefty 12% annual interest—talk about a high return! Maturing on July 31, 2029, they come with the flexibility of early redemption with 60 days' notice, should High Tide decide to ride a different wave. Secured and ranking just behind senior lenders, this financial move positions High Tide to capitalize on real-world value across every component of cannabis. Investors might just find this deal as refreshing as a sea breeze.
👾 Number Of The Day
$553.1M Total number of flower sales in MD over the last year.
Data provided by:
🗞️ The News
📺 YouTube
Latest Trump News + Cannabis Stock Ascend Wellness Reports $141M | Trade to Black
What we covered:
✅ On a special edition of our Trade To Black podcast, Ascend Wellness (OTC: AAWH.U) President Frank Perullo will join us to discuss the latest earnings from the cannabis company.
Highlights include $141.6 million in net revenue for Q3 2024, $25.1 million in Adjusted EBITDA, and an anticipated $30 million in annual savings through transformation initiatives.
Plus, we dive into recent news involving former New Jersey Governor Chris Christie, who believes President-elect Donald Trump will attempt to reclassify marijuana as a non-scheduled drug, effectively making it legal. This change could allow banks and other institutions more freedom to do business in the cannabis sector.