Adam Jackson
Chicago-based Verano Holdings Corp. (NEO: VRNO) (OTCQX: VRNOF) posted record revenues for the third quarter as the company benefits from expanded adult-use markets and wholesale growth.
The multistate cannabis company reported that its revenue for the quarter ended Sept. 30, reached $240 million, marking a 5% increase year-over-year and a 3% rise from the second quarter of 2023. The results signify the highest quarterly sales figure in the firm’s history, driven by major adult-use transitions in Maryland and Connecticut.
The figure also barely skimmed below analysts’ average expectation of $240.34 million.
Verano’s profitability metrics also showed improvement, with net cash provided by operating activities up year-over-year, and the company boosted its free cash flow projections for the year to $72 million-76 million, from a previous range of $65 million-75 million.
“Our strong performance resulted from key drivers that include another seamless adult use transition in Maryland, the continued expansion of our wholesale business and market-leading positions in Connecticut and New Jersey, successful new product launches and line extensions across our growing brand portfolio, and the addition of new dispensaries to bolster our expanding retail footprint in key states,” CEO George Archos said in a statement.
In a sign of operational efficiency, Verano’s gross profit increased, aligning with revenue growth. However, the company’s net loss narrowed to $18 million for the quarter, improving from a $43 million loss in the same period last year.
Operational highlights for the company included the launch of adult-use sales at its Maryland locations on July 1 and the opening of new dispensaries in strategic Florida and Connecticut markets, boosting its retail presence. Additionally, Verano has been proactive on the capital markets front, commencing trading on Cboe Canada to enhance its investment appeal.
Despite capital expenditures for the first nine months falling to $27 million from $110 million in the prior-year period, the company’s aggressive expansion hasn’t waned. As of the quarter’s end, Verano operated 135 dispensaries and 14 production facilities, a far-reaching footprint in the U.S. cannabis market.
On the balance sheet, Verano’s liquidity remains robust, with current assets totaling $355 million, including a substantial cash and cash equivalents position of $130 million. Still, the company carries a hefty debt load, with total debt standing at $422 million.
VRNOF was up nearly 10% in early trading Wednesday.
