Cannabis Companies Report Sluggish Q3

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis companies. This update is our first since late August, and there will be many financial releases very soon.

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$34.3 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$17.1 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, Aurora Cannabis (NASDAQ: ACB) (TSX: ACB), Ispire (NASDAQ: ISPR), 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 October 27th, 35 companies qualified for inclusion on the senior list, including 29 filing in U.S. dollars and 6 in the Canadian currency. Currently, 30 companies that file in U.S. dollars qualify and 6 that file in Canadian dollars are qualifying for the senior lists, a total of 36. The junior list now includes 11 companies reporting in U.S. dollars and 5 in Canadian dollars. On a combined basis, the Public Cannabis Company Revenue & Income Tracker now includes 52 companies. Since late October, Planet 13 (OTC: PLNH) (CSE: PLTH) slipped from the senior list to the junior list, while Flora Gold (OTC: GRAM) (NEO:GRAM) and iPower (NASDAQ: IPW) did the reverse, moving up from the junior to the senior list. 22nd Century Group (NASDAQ: XXII) fell off of the junior list, and Ispire is new to the junior list.

Included Companies That Reported since October

Since our last update, most of the companies have reported. It was not a great quarter for revenue growth.

Senior and Junior – American Dollar Reporting

The 5 largest MSOs have all reported. Curaleaf (OTC: CURLF) (CSE: CURA) saw its sales shrink sequentially while growing just 2% from a year ago. Green Thumb Industries (OTC: GTBIF) (CSE: GTII) enjoyed more growth sequentially as its revenue increased 5% from a year ago. Trulieve (OTC: TCNNF) (CSE: TRUL) continued to experience declines, while Verano (OTC: VRNOF) (CSE: VRNO) advanced modestly. Cresco Labs (OTC: CRLBF) (CSE: CL) reported this past week and shrank too, though less than analysts had expected.

Among the larger ancillary companies, Scotts Miracle-Gro (NYSE: SMG) saw its Hawthorne business shrink again. GrowGeneration (NASDAQ: GRWG) soared on insider buys made by its CEO and by its President, but the quarter was down a lot in revenue from the prior quarter and a year ago. WM Technology (NASDAQ: MAPS) saw its revenue decline again, but the pace moderated. More importantly, perhaps, the adjusted EBITDA was far better than expected and rose substantially sequentially and from a year ago.

Senior and Junior – Canadian Dollar Reporting

None of these companies that reported has hit C$100 million in quarterly revenue. Of note, Canopy Growth (NASDAQ: CGC) (TSX: WEED) became a cannabis-only revenue generator, so we were able to include its adjusted operating income.

The only company at more than C$100 million of quarterly revenue, High Tide (NASDAQ: HITI) (TSXV: HITI), which is down 22.7% so far in 2023, will report its Q4 by the end of January. Analysts expect the revenue to increase 16% from a year ago to C$126 million with adjusted EBITDA of C$7 million. By the end of November, Organigram (NASDAQ: OGI) (TSX: OGI) will report its Q4, which analysts project will see revenue fall 13% to C$40 million with adjusted EBITDA of C$1 million. The company has not yet scheduled a conference call. The stock of the company, which is debt-free and has substantial cash, trades at just 50% of its tangible book value.

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.

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email