Debra Borchardt
Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) delivered its results for the second quarter ending June 30, 2021, as revenues increased 39% sequentially and 164% from the second quarter of 2020 to $198 million. It was a big miss versus the Yahoo Finance average analyst estimate for revenue of $241 million. Verano noted that the financial information was reported on a pro forma consolidated basis accounting for the AltMed acquisition as if completed on January 1, 2021, and all currency is in U.S. dollars.
Verano reported that its net income, including the impact of biological assets, was $6.8 million. Excluding the impact of biological assets, net income was $32 million in the second quarter of 2021, compared to $8 million in the first quarter of 2021. The earnings per share reported by Verano were $0.05 for basic and $0.02 for diluted. This was a big miss versus the average estimate for earnings of $0.32.
“This was a very strong quarter, particularly in topline revenue growth, which reflects our proven ability to execute in both the retail and wholesale verticals,” said George Archos, Verano CEO and Founder. “We executed exceptionally well on our expansion plans in the second quarter, adding 16 dispensaries to our footprint between new doors opened and acquisitions closed, providing an additional runway for growth in core markets such as Arizona, New Jersey, Pennsylvania, Illinois, and Florida. Building on this momentum, we anticipate exiting the year with an annual revenue run rate approaching $1.1 billion.”
Expenses climbed as Verano reported SG&A expenses were $53 million, or 27% of revenue, compared to $29 million, or 20% of revenue, in the first quarter of 2021. However, no worries as the company is sitting on a pile of cash. As of June 30, 2021, the company’s current assets on a pro forma consolidated basis were $572 million, including cash and cash equivalents of $150 million. Verano said it had working capital of $285 million and total debt, not including lease liabilities and net of issuance costs, of $131 million. Total liabilities are $708 million, which were only $216 million at the end of 2020.
After The Quarter
Verano continued to build its empire after the quarter closed. In July, Verano completed the acquisitions of Agri-Kind and Agronomed Biologics in Pennsylvania, allowing for vertical benefit realization in the state by adding an active 62,000 square foot, indoor cultivation and production facility, and a permit to build out a second cultivation facility and six additional dispensaries—two of which it has already opened. Also in July, Verano maximized its retail footprint in Ohio with five dispensaries upon closing its acquisition of Mad River Remedies, LLC, a high-volume storefront in Dayton. Before July ended, Verano strategically expanded its presence into Northern Nevada with the announcement of its planned acquisition of Sierra Well, which will add approximately 10,000 square feet of active cultivation and production capacity, and two top-performing dispensaries in Reno and Carson City.
Verano currently has 83 operating dispensaries and said it expects to hit 90 by the end of 2021.
