Columbia Care Reports Record Third Quarter 2021 Results
- Record Quarterly Revenue of $132.3 Million, an Increase of 144% YoY, 21% QoQ
- Record Quarterly Adjusted Gross Profit of $64.5 Million, an Increase of 205% YoY, 35% QoQ
- Record Adjusted Gross Margin of 49%, an Increase of 965bps YoY, 527bps QoQ
- Record Adjusted EBITDA of $31.0 Million, an increase of 634% YoY, 89% QoQ
- Record Adjusted EBITDA Margin of 23%, an increase of 1,564bps YoY, 848bps QoQ
- Revises 2021 Guidance to $470M – $485M Revenue, $85M – $95M Adjusted EBITDA and 46% Adjusted Gross Margin for Full Year 2021
NEW YORK-November 12, 2021-(BUSINESS WIRE)–Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (“Columbia Care” or the “Company”) today reported financial and operating results for the third quarter ended September 30, 2021. All financial information is unaudited and provided in US dollars unless otherwise indicated.
We are pleased to report accelerating momentum and another record quarter for Columbia Care as fundamentals continue to improve and we execute on our national strategy.
Nicholas Vita, CEO of Columbia Care
With sequential revenue growth of over 20%, Columbia Care has continued to outpace the market while also maintaining margin discipline to achieve record company profitability, reflected in increased EBITDA margin and gross margin for the quarter.
Vita continued, “In the third quarter, we opened new dispensaries in New Jersey and Missouri, and, in line with our technology roll out, we progressed with the launch of Cannabist locations, with eight conversions completed to date, including Downtown Boston. We continued to gain market share and grow margins in Florida, where we will be converting all our dispensaries to Cannabist from Columbia Care. As expected, we are seeing tangible operational benefits driven by our proprietary technology solutions, such as Forage.”
“Our team continues to execute on our strategic objectives and to be the first to seize upon tactical milestones as they materialize. We were the first operator to offer whole flower in Virginia and New York, and we are prepared to be among the first to transition in scale to adult use in New Jersey, New York, and Virginia – all of which are expected to grow into multi-billion dollar markets. In October, we choreographed the largest single-day national flower brand launch in the history of the industry. Furthermore, we have growth initiatives underway throughout the country that will accelerate our trajectory and profitability at each inflection point in the coming quarters. We see momentum building into 2022 and beyond as we optimize our national portfolio and launch brands throughout our markets.”
Third Quarter 2021 Financial Highlights (in $ thousands, excl. margin items):
[1] Excludes changes in fair value of biological assets and inventory sold for all periods presented, as well as $1.4 million in Q3 2021 and Q2 2021 and $1.8 million in Q3 2020 related to the mark-up of inventory acquired in acquisitions.
[2] Represents Reported Results
[3] Represents Combined Results, which include dispensary operations in Ohio.
Third quarter 2021 results include a full quarter of Green Leaf Medical. Since the close of the CannAscend transaction on July 1, 2021, the Company will no longer report Combined results.
Top 5 Markets by Revenue[4]: California, Colorado, Massachusetts, Ohio, Pennsylvania
Top 5 Markets by Adjusted EBITDA[4]: Illinois, Maryland, Massachusetts, Pennsylvania, Virginia
[4] Markets are listed alphabetically
Select Market Highlights
California:
- Cultivation upgrades to increase yield, efficiency, and quality of production in light of wholesale market softness and pricing pressure are nearly complete; awaiting approval for additional indoor cultivation capacity
- Sequential revenue down 10% due to lower wholesale revenue, pricing pressure at the wholesale and retail level offset by record retail transaction volume
- Gross margin impacted by declining wholesale prices due to supply glut and planned lower biomass output during cultivation upgrade efforts that were completed in early October; seeing early indications of gross margin improvement into Q4
Colorado:
- Sequential revenue declined slightly due to retail softness from ADS contraction offset by increased transaction volume, up 160% YoY
- Gross margin stable as upgrades were completed in Steele indoor cultivation facility; first significant harvest occurred in October
- Harvesting underway in Trinidad with record grams per plant and THC levels vs historical metrics
Florida:
- Q3 revenue increased 241% over Q3 2020; following standout 46% increase in revenue sequentially in Q2, sequential revenue declined 7% in Q3 due to discounting pressures and softer ADS as we worked through existing legacy biomass and strains
- Nearly 1,700bps increase in gross margin quarter over quarter due to continued scale and yield improvements and discounting discipline; Florida is now a Top 5 Market by Adj. Gross Margin
- Continued focused on expanding product lines, increasing supply of edibles and other manufactured products across retail footprint to support continued market share gain
Illinois:
- Sequential revenue increased 14% in Q3 and 159% YoY, primarily driven by increased retail sales with transaction volumes up 23% sequentially, offset by a decline in ADS
- Production efficiencies resulting in >30% THC products and strong terpene profiles
- Jefferson Park dispensary expansion to triple the size of the space is expected to be completed in Q4 2021
Maryland:
- With incorporation of gLeaf, sequential revenue increased more than 380%; Maryland was a Top 5 contributor to EBITDA in Q3
- Vertical integration and robust wholesale distribution supported significant improvement in gross and EBITDA margins
Massachusetts:
- Sequential revenue growth of 6% and 19% YoY with record transaction volume and record wholesale revenue in the quarter
- Adult use sales began at Boston Cannabist co-located dispensary in August
- Addition of automation equipment for flower and pre-roll, showed positive financial impact in Q3
New Jersey:
- Revenue increased 45% sequentially in Q3; gross margin continued to improve, increasing more than 2,700bps sequentially with record transaction volume and ADS
- Deptford Cannabist dispensary opened in August; third location in Hamilton Township expected to open in Q1 2022
- Second cultivation and production facility in Vineland is under development and will provide 250,000sqft of additional canopy, manufacturing, and distribution space to support medical and adult-use in 2022
New York:
- Revenue up 4% sequentially and 43% YoY; gross margin improved 600bps with third consecutive quarter of increased ADS
- Cultivation operations began at Long Island cultivation facility (~1M sqft) in September, with expected initial harvest in Q4
- Flower sales began on October 25; Columbia Care was first operator to offer whole flower sales in New York
- As an existing Registered Organization, we are in the process of locating four incremental medical dispensaries to add to our current four medical dispensaries; three of the added dispensaries will be co-located with adult-use for a total of eight dispensaries in New York
Ohio:
- Revenue increased 17% sequentially and 83% YoY
- Record transaction volumes offset by a decline in ADS
- CannAscend and Corsa Verde acquisitions closed July 1, no longer reporting Combined metrics
- Columbia Care flower is available via wholesale in more than 90% of all dispensaries in state
- Mt. Orab cultivation facility to have incremental canopy available by Q1 2022
Pennsylvania:
- Revenue increased 51% sequentially and 85% YoY, including a full quarter of gLeaf
- Gross margin improved 1,350bps sequentially, as Columbia Care is now vertically integrated in PA with the gLeaf’s 174,000sqft expansion underway, for a total of 274,000sqft upon completion
- gLeaf currently wholesales to nearly all dispensaries in Pennsylvania (+95%)
- Introducing award winning Columbia Care brands and formats in PA in Q4 2021
Virginia:
- Flower sales began September 9, which has driven revenue increase of 225% QoQ, including gLeaf contribution following June 10 acquisition closing with record transaction volume and ADS
- Sequential gross margin improvement of more than 5,500bps
- Third dispensary opened in Richmond suburb on November 8, with two additional dispensaries expected to open by year-end; actively pursuing dispensary locations, for a total of 12 dispensaries between Columbia Care and gLeaf
2021 Outlook
The Company is revising its guidance for 2021, primarily driven by the impact of unanticipated regulatory delays, for example delays in opening of dispensaries in Massachusetts (Boston), New Jersey and West Virginia; delayed approvals for dispensary expansion in Illinois; delayed implementation of adult use in New Jersey; and a later than expected close of the Medicine Man transaction. In addition, wholesale pricing dynamics in some markets, such as California and Pennsylvania, and competitive market share dynamics in Florida have also impacted results and expectations. See “Caution Concerning Forward-Looking Statements” below for further discussion.
Conference Call and Webcast Details
The Company will host a conference call on Friday, November 12, 2021 at 8:00 a.m. ET to discuss its financial and operating results for the third quarter of 2021.
To access the live conference call via telephone, please dial 1-877-407-8914 (US callers) or 1-201-493-6795 (international callers). A live audio webcast of the call will also be available in the Investor Relations section of the Company’s website at https://ir.col-care.com/ or at https://78449.themediaframe.com/dataconf/productusers/colc/mediaframe/46646/indexl.html.
A replay of the audio webcast will be available in the Investor Relations section of the Company’s website approximately two hours after completion of the call and will be archived for 30 days.
Non-IFRS Financial Measures
In this press release, Columbia Care refers to certain non-IFRS financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin and gross profit excluding changes in fair value of biological assets and inventory sold. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-IFRS measures to be meaningful indicators of the performance of its business. A reconciliation of such non-IFRS financial measures to their nearest comparable IFRS measure is included in this press release and a further discussion of some of these items is contained in the Company’s Management’s Discussion and Analysis for the three months ended September 30, 2021.
About Columbia Care Inc.
Columbia Care is one of the largest and most experienced cultivators, manufacturers and providers of cannabis products and related services, with licenses in 18 U.S. jurisdictions and the EU. Columbia Care operates 131 facilities including 99 dispensaries and 32 cultivation and manufacturing facilities, including those under development. Columbia Care is one of the original providers of medical cannabis in the U.S. and now delivers industry-leading products and services to both the medical and adult-use markets. In 2021, the company launched Cannabist, its new retail brand, creating a national dispensary network that leverages proprietary technology platforms. The company offers products spanning flower, edibles, oils, and tablets, and manufactures popular brands including Seed & Strain, Triple Seven, gLeaf, Classix, Plant Sugar, Press, Amber and Platinum Label CBD. For more information on Columbia Care, please visit www.col-care.com.
