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4Front Ventures Corp. FFNT FFNTF, a vertically integrated, multi-state cannabis operator and retailer, announced its financial results late Monday for the second quarter ended June 30, 2022. 4Front reported pro forma revenue (non-GAAP measure) was $34.5 million, an increase of 6% from the first quarter of 2022. Meanwhile, an adjusted EBITDA (also non-GAAP) of $9.2 million in the second quarter, represented an increase of 2% from the first quarter of 2022.
Highlights Of The Second Quarter
- GAAP revenue increased 5% year-over-year to $28.4 million.
- Adjusted EBITDA increased 22.7% year-over-year to $9.2 million.
- Accretive acquisition of Island Cannabis Co. was completed in April 2022.
- As of June 30, 2022, the company had $6.0 million of cash and $49.5 million of related-party long-term debt not due until May 2024. As of Monday 4Front has 636,636,686 subordinate voting shares outstanding.
“We are seeing an acceleration of business trends within our growth markets, particularly in Massachusetts and California. Our retail locations platform-wide maintained or gained market share. We believe we are poised for a significant leg of growth to take place over the next 12 months as we leverage our investments in state-of-the-art automation and scaled manufacturing processes, supplemented by strategic and accretive M&A,” said Leo Gontmakher, CEO of 4Front.
“We secured active partnerships with more than five leading retailers; a statewide delivery service; and a multi-state operator. We are now providing production and packaging of gummies, vapes, infused pre-rolls, distillate and diamonds to these customers with scale and at a price-point they would be challenged to achieve on their own. In the distressed and fragmented California market, we are seeing increased interest from companies looking to 4Front as their low-cost producer of choice.”
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Q2 2022 Financial Overview
GAAP revenue for the second quarter of 2022 (Q2 2022) was $28.4 million, up 5% YoY and up 9% sequentially.
“This increase is primarily due to increased revenue in the Company’s wholesale revenue as it ramps up those portions of its business in California, Illinois, and Massachusetts,” reported the firm. “Continued growth of Adjusted EBITDA and margins is expected to persist through 2023 as the Company’s operations drive increased production and higher sales volumes without material increases to overhead.”
Operational Highlights
- In April 2022, the Company completed its acquisition of Island Global Holdings, Inc. dba Island Cannabis Co., a leading California producer of pre-rolls, flower and concentrate products. The acquisition of Island adds new high-quality products to 4Front’s growing brand portfolio, including diverse lines of pre-rolls, flower and infused products with a strong following from local California consumers.
- In the second quarter of 2022, 4Front secured numerous private label partnerships with leading California retailers.
- 4Front also announced on August 15 that it has signed a definitive agreement to acquire the Bloom Farms and Bloom Farms Wellness. The company seeks a reduction in manufacturing costs and increased sales.
- Phase 1 Construction of the company’s cultivation and production facility in Matteson, Illinois is expected to remain on schedule to be delivered in the fourth quarter of 2022.
Photo by CRYSTALWEED cannabis on Unsplash.
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Image and article originally from www.benzinga.com. Read the original article here.