John Schroyer
Colorado-based cannabis equipment supplier Urban-Gro (Nasdaq: UGRO) posted a $15.3 million loss for 2022 in its fourth-quarter earnings report and chalked the difficulties up to “significantly reduced equipment demand” and broader troubles in the U.S. marijuana industry, along with a $93 million backlog of orders the company has yet to fulfill.
The annual financial result was a 1,700% increase from 2021, when Urban-Gro posted a $900,000 loss.
Still, CEO Brad Nattrass called the year a “successful” one for Urban-Gro, and said in a press release, “Despite headwinds we encountered in the cannabis sector, we continued to execute our long-term strategy by adding new capabilities and expertise to our business.”
Nattrass pointed to Urban-Gro’s acquisition of Emerald Construction Management and the engineering firm DVO last year, as well as the hiring of a new chief operating officer and the opening of the company’s first European office in the Netherlands.
Nattrass said all of that is evidence Urban-Gro is “a company that can continue to deliver growth in a turbulent environment,” and also predicted that the broader cannabis market will rebound this year.
“We anticipate a recovery in the cannabis sector later this year and a corresponding increase in equipment systems sales as well. Until this timing becomes clearer, we remain committed to driving efficiencies in our model,” Nattrass said.
The CEO further pointed to the company’s revenues in the fourth quarter, which was up 5% from Q3 to $17.3 million, as evidence that Urban-Gro is capable of weathering the current industry downturn.
Revenue for the full year was $67 million, up 7.9% from 2021, and the company also had $12 million in the bank at the end of 2022.
Still, difficulties compounded into a multimillion dollar loss, which Urba-Gro said is largely thanks to “ongoing state-level regulatory delays in the license-awarding process, as well as the lack of movement on passing key legislation impacting the industry.”
