Debra Borchardt
Columbia Care Inc. (CSE: CCHW) (OTCQX: CCHWF) reported financial results for the second quarter ending June 30, 2022, with revenue rising 18% to $129 million over last year’s $109 million. Revenue grew 5% sequentially from the first quarter. The company reported a net loss of $54 million versus last year’s net loss of $18 million, higher than the previous quarter’s net loss of $27 million. This is also expected to be the last quarterly earnings report before the company combines with Cresco Labs.
“In these challenging times, Columbia Care achieved exceptional results in several key markets that serve as meaningful, positive long-term indicators. Despite the economic headwinds and challenges that were particularly impactful in our most mature markets, we saw surprising resilience across the country, in addition to outstanding performance in our highest growth, emerging markets. We delivered solid organic topline growth of 5% sequentially to reach $130 million in revenue for the quarter, an increase of 18% over Q2 2021. New Jersey, the most recent state to launch adult use, was a primary driver in sequential revenue growth, along with Virginia and West Virginia, where we are the number one wholesaler and retailer in these rapidly-expanding medical markets” said Nicholas Vita, CEO of Columbia Care.
Best Markets
Col-Care said its top five markets by revenue in the second quarter were California, Colorado, Massachusetts, Pennsylvania, and Virginia. However, it was New Jersey that put it over the top this quarter. In April, New Jersey launched adult-use sales with limited hours but expanded to full adult use hours in June 2022, and revenue in New Jersey more than doubled sequentially. During the quarter, the company said it operationalized its second cultivation facility in New Jersey, adding approximately 270,000 square feet of cultivation and production capacity, as well as post-harvest automation equipment. The first harvest from the second cultivation site is expected in the third quarter of 2022.
Vita continued, “Sixteen of our seventeen U.S. markets generated positive EBITDA in the quarter and twelve markets saw sequential improvement in gross margin. Excluding California and Colorado, our EBITDA margin would have been over 500 basis points higher for the quarter. We continued to drive the organization forward by capitalizing upon growth from emerging markets as they transition to more favorable regulatory environments, leveraging our expanding scale, and implementing strategies in mature markets to consolidate supply and distribution channels.”
Looking Ahead
Columbia Care forecasts continued sequential top-line growth of mid-single digits in each of the next two quarters. In addition, the company said it expects sequential improvements in market level EBITDA margin in the range of 150-250 basis points per quarter compared to its year-to-date results.
“For the remainder of 2022, Columbia Care will execute against our strategic priorities while completing the steps necessary to close the merger with Cresco on time. The integration planning process has brought an overwhelming sense of excitement and momentum. As a founder of Columbia Care, seeing our organizations collaborate so well has been humbling and deeply gratifying. Our shared vision has enabled both organizations to focus on the range of opportunities that lay before us and meet the future with clarity, momentum, and capabilities that will drive outsized shareholder value for years to come. The embedded growth and sustainable margin opportunity being unlocked by this combination will be a game changer.”
