Chicago, Illinois-headquartered cannabis company Verano Holdings Corp. (Cboe CA:VRNO) (OTCQX:VRNOF) released its financial results Wednesday for the first quarter ended March 31, 2024, revealing revenue of $221 million, a decrease of 3% year-over-year and a decrease of 7% versus the prior quarter, exceeding the company guidance.
According to the press release, the decrease in revenue was driven primarily by expected declines in New Jersey retail as dispensaries continue to open across the state, which was partially offset by stronger-than-expected performance from the wholesale segment.
"I am tremendously proud of the strong foundation we've built in the first quarter, which positions Verano to capitalize on what may be one of the most transformative years for legal cannabis in our nation's history," stated George Archos, Verano founder and CEO. "While we've never built our business based on legislative assumptions, we have tremendous upside across all of our markets to take advantage of the massive potential catalysts that lie ahead in 2024. With adult-use imminent in Ohio, confirmed on the November ballot in Florida, and on the horizon in Pennsylvania, we have significant opportunities in these core Verano markets where we currently operate nearly 100 retail dispensaries alone. If fully approved, layering on DEA rescheduling would have also enabled us to save an estimated $80 million in tax payments in 2023, allowing us to reinvest back into the business, and take swift action towards listing on a U.S. exchange if permitted."
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First Quarter 2024 Financial Highlights
- Gross profit of $113 million or 51% of revenue, up from $109 million or 48% of revenue for the first quarter of 2023.
- SG&A expense of $90 million or 41% of revenue, up from $75 million or 33% of revenue for the same period of 2023.
- Net loss amounted to $5 million, versus net loss of $9 million in the comparative quarter of last year.
- Adjusted EBITDA was a gain of $67 million, which compares to adjusted EBITDA of $71 million in the same period of 2023.
- Net cash provided by operating activities of $31 million, up from $17 million for the first quarter of 2023.
- Free cash flow of $21 million, up from $8 million for the first quarter of 2023.
Archos concluded: "With the growing strength of our wholesale business in key markets, disruptive innovation demonstrated by our launch of the nation's first dispensary membership model in Cabbage Club, state and federal catalysts on the horizon, and our team's proven operational experience and agility converting medical to adult use markets throughout our history, I remain confident and excited in what Verano can achieve in 2024 and beyond."
The company issued flat to low single-digit revenue growth guidance for the second quarter of 2024.
Price Action
Verano shares closed Tuesday's market session 4.62% lower at $4.95 per share.
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