Greenrose Holding Company Inc. (OTC: GNRS, GNRSW) posted increasing losses for the consecutive quarter as its cultivators navigated demand headwinds. The multi-state cannabis SPAC (particular purpose acquisition company) reported its second-quarter financials ending June 30, 2022.
While Greenrose reported approximately $9.2 million in rising revenue during the period, the Company’s second-quarter net losses totalled $10.3 million, down 132% sequentially compared to a net income of $3.3 million in the same period last year. The earnings lost 0.63 cents per share compared to 0.92 cents in the first quarter.
The Company attributed the loss to production interruptions at True Harvest and demand headwinds in the Connecticut market. It also incurred an increased interest expense of $6.9 million, a purchase accounting fair value inventory step-up of $2.2 million, and an intangible amortization expense of $4.0 million.
Thera plant said its second-quarter revenues decreased year-over-year due to year-over-year “sustained demand headwinds in Connecticut’s medical market, as well as increased competition and impacts from the state’s illicit market.”
The Company attributed True Harvest’s second-quarter revenue to production disruptions “from construction on our additional grow rooms.”
“While we continued to incur higher costs associated with ramping our expanded cultivation capacity at both True Harvest and Theraplant, we believe this work improves our positioning for improving our operations in Arizona and preparing for Connecticut’s forthcoming recreational market, respectively,” CEO Mickey Harley said. “As we progress into the second half of 2022, we remain focused on leveraging our existing production efficiencies to deepen and expand our presence in our existing state markets.”
In Connecticut, Greenrose said that the Company and its partners tried to apply for four retail licenses and two hybrid retail licenses as part of the state’s equity joint venture (EJV) program but were denied Connecticut’s Social Equity Council.
“We are working to address application deficiencies,” the Company said.
Greenrose posted second-quarter adjusted EBITDA of $3.1 million versus $4.6 million in the prior year quarter. The Company said the slump was “primarily driven by the aforementioned lower level of gross profit generated during the quarter, higher corporate general and administrative expenses, and costs related to ramping the Company’s production capacity at Theraplant and True Harvest.”
The Company recorded cash and cash equivalents combined with restricted cash at $2.7 million versus $9.1 million on December 31, 2021. It said acquisition-related expenses and debt obligations drove the decrease.
Greenrose suspended its previously stated full-year 2022 guidance “due to regulatory delays surrounding the expected timing of Connecticut’s recreational cannabis market…As regulatory visibility improves, the Company expects to re-evaluate and provide further updates on its 2022 outlook.”
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Posted by: Times Of Hemp, TOH, #TOH, #TimesOfHemp https://www.timesofhemp.com
