Adam Jackson
Greenlane Holdings (Nasdaq: GNLN), a company that sells cannabis accessories and specialty vaporization products, recently shared its financial results for the fourth quarter and full year ending Dec. 31, 2022.
Total revenue for 2022 was $137.1 million, down 17.4% from the previous year.
Despite the decrease, the company anticipates reaching a positive adjusted EBITDA by Q4 2023, thanks to a new strategic plan that emphasizes scalable, sustainable revenue with steady margins.
Greenlane reorganized its industrial division to concentrate on higher-profit and higher-value products in its consumer division, while also cutting costs and lowering adjusted SG&A by 11.8% to around $72.3 million.
Greenlane is also expanding its worldwide multichannel approach by launching B2B websites in the U.S. and Europe, revamping two of its direct-to-consumer sites, and partnering with distributors in important international markets.
Additionally, the company introduced a new product line called Groove, featuring budget-friendly, straightforward, practical, and dependable items.
“Greenlane, and our entire sector, faced a challenging year in 2022,” CEO Craig Snyder said in a Monday statement. “As we did not perform up to the expected standards, we initiated and are executing an aggressive transformative strategy to actively put the business on a path to profitability.”
In 2022, the company recorded a net loss of $125.9 million, according to filings. However, Greenlane managed to reduce the loss by $84.2 million through non-cash actions and by increasing cash from day-to-day business activities by $15.2 million.
One major non-cash action was a $71.4 million charge for reducing the value of goodwill and intangible assets.
The 2022 revenue decline resulted from a drop in the company’s consumer goods segment, which fell by $62 million or 56.3% versus the previous year. The industrial segment rose by $33 million or 59% due to net sales from the company’s 2021 merger with KushCo.
According to filings, the company has taken several steps to improve its core business and increase profitability, such as reducing costs, selling non-core assets, and securing an asset-based loan. It also plans to develop a portfolio of proprietary brands, which will help increase margins and create long-term value.
The company already sold off its packaging division, consolidated warehouse operations, and sold excess inventory. Management believes these initiatives will significantly reduce costs and support growth.
The company projected revenue by the end of the first quarter this year to range between $23 million and $24 million, a 5-10% increase since Q4 2022. The growth is anticipated to be driven by the consumer goods segment, which is expected to grow by over 10% compared to the prior quarter.
“Our expanded global reach with strategic market distribution partners including in Latin America, Canada, Puerto Rico and Mexico enables us to reach consumers globally without the necessity of establishing operations in those locations, which is key to continue to scale our brands globally,” Snyder said. “With our innovative product development and growth strategy initiatives in place, we believe we have a strong trajectory for success in 2023.”
