Cannabis Earnings Season Has Been Challenging

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis companies. December and January were a slow period for reporting, and February saw a pickup. March has been a lot busier.

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, Jazz Pharma (NASDAQ: JAZZ) and Tilray (TSX: TLRY) (NASDAQ: TLRY) aren’t providing this information. Please note as well that we updated how we are handling Canopy Growth (TSX: WEED) (NASDAQ: CGC), now excluding the non-cannabis revenue of BioSteel.

Tracker Inclusion Updates

At the time of our last update on February 27th, 38 companies qualified for inclusion on the senior list, including 30 filing in U.S. dollars and 8 in the Canadian currency. Currently, 30 companies that file in U.S. dollars qualify and 7 that file in Canadian dollars are qualifying for the senior lists, a total of now 37. The junior list now includes 8 companies reporting in U.S. dollars and 4 in Canadian dollars. On a combined basis, the Public Cannabis Company Revenue & Income Tracker now includes 49 companies.

HEXO Corp. (TSX: HEXO) (NASDAQ: HEXO) moved from the senior list to the junior list among companies that report in Canadian dollars. 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 Late February or In Early March

Since our last update, there have been several companies that have reported, but we had no new additions to the rankings.

Senior – American Dollar Reporting

The Q4 reports of the leading MSOs haven’t been too far off from expectations thus far, but the analysts have sharply lowered their forecasts for 2023. Three of the very largest MSOs have reported so far, Trulieve (OTC: TCNNF) (CSE: TRUL), Green Thumb Industries (OTC: GTBIF) (CSE: GTII) and Cresco Labs (OTC: CRLBF) (CSE: CL). Trulieve revenue was flat sequentially and fell 1% from a year ago. Green Thumb Industries saw revenue slip 1% sequentially. Cresco Labs experienced a decline sequentially and from a year ago.

Other large MSOs that have reported are Ascend Wellness (OTC: AAWH) (CSE: AAWH.U), Ayr Wellness (OTC: AYRWF) (CSE: AYR.A) and TerrAscend (OTC: TRSSF) (CSE: TER). The Ascend Wellness and Ayr Wellness revenues were below expectations but grew sequentially and from a year ago. TerrAscend revenue was ahead of the consensus, growing 4% sequentially and 50% from a year ago.

Among ancillary companies, Scotts Miracle-Gro (NYSE: SMG) saw very weak cannabis-related revenue. Innovative Industrial Properties (NYSE: IIPR) slightly exceeded expectations. Hydrofarm (NASDAQ: HYFM) was significantly ahead of expectations.

Ahead,  two of the largest MSOs are scheduled to report next week. Curaleaf (OTC: CURLF) (CSE: CURA) revenue is expected, according to the consensus calculated by Sentieo, to increase 11% to $354 million with adjusted EBITDA of $86 million . Verano Holdings (OTC: VRNOF) (CSE: VRNO) revenue is expected to increase 7% to $226 million with adjusted EBITDA of $76 million.

Senior and Junior – Canadian Dollar Reporting

Canadian LP HEXO Corp. saw revenue plunge in its Q1, and the company moved from the senior list to the junior list.

From the senior group, retailers Nova Cannabis (TSX: NOVC) (OTC: NVACF) and Fire & Flower (TSX: FAF) (OTC: FFLWF) are scheduled to report next week. Nova Cannabis is expected to have generated a record C$48 million in revenue in its Q4, up 176% from a year ago. Fire & Flower is reporting a short quarter as it transitions to a December year-end. Analysts project revenue will be C$30 million.

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