The cannabis sector was a mixed bag this week with some solid and inspiring financial reports and some disappointing returns. Here is a review of those below.
1. Greenlane Holdings’ Q1 Sales Increase 15%
Over the last 5 days the stock is up more than 15% and Greenlane’s
“We have a diverse base of more than 6,600 B2B customers. While we distribute our products to a growing number of large national and regional retailers in Canada, our typical B2B customer is an independent retailer operating in a single market.”
The company’s recent reported revenue is $49.9 million, an increase of 15.3%, compared to $43.3 million in the first quarter of 2018. Gross profit for the first quarter of 2019 was $9.0 million, or 18.0% of revenue, compared to $9.1 million, or 20.9% of revenue, for the same period in 2018.
“We are very pleased to report our first quarterly financial results as a publicly traded company and are off to a strong start to fiscal 2019,” stated Aaron LoCascio, Greenlane’s Chairman and Chief Executive Officer. “We generated 15.3% revenue growth in the first quarter, which is particularly impressive given our very strong revenue numbers in the same period last year. Our top selling products continue to generate strong sales momentum and we have seen a robust response to our introduction of hemp-derived CBD products in late February. We are continuing to expand our hemp-derived CBD offerings and see considerable opportunity in this on-trend and growing category. In April, we enhanced our e-commerce capabilities with the launch of Vapor.com, which will leverage traffic from our existing sites. We believe Vapor.com will become the leading e-commerce platform in the industry.”
2. Cronos Group Disappoints
One reason to be optimistic on Cronos is due to the closing of their strategic partnership and investment with Altria totaling $2.4 billion.
“Altria also has significant expertise that can serve as the foundation for Cannabis vape products as well as considerable experience with large scale manufacturing automation, pre-rolls technology and supply chain management,” Mike Gorenstein, Chairman, President & Chief Executive Officer “Like Altria, we believe that the best way to create value to the supply chain is by working with contract farmers and not being farmers ourselves. This belief is why we are working to expand our production footprint globally by setting up co-manufacturing with agricultural partners and we believe in the future, Altria can be helpful in these efforts given its own agricultural relationships.”
Besides this deal, which gives them a lot of runway financially, the company’s sales are still on the rise and growing capacity is advancing on schedule. It seems a little premature for investors to panic.
3. Halo Labs Reports Record Revenues
Extraction specialist, Halo Labs
The company has also rolled out its new DabTab™ line, which should further increase sales especially in California, where Halo sees strong sales growth ahead as they just recently launched their 2nd Cathedral City location, which will increase production in the state.