The Greenrose Holding Company (OTCQX:GNRS) has announced financial and operating results for the second quarter ended June 30, 2022, noting expanded cultivation capacity in Arizona and Connecticut.
A multi-state cultivator and producer of cannabis brands and products, Greenrose’s 2Q revenue increased 40% to US $9.2 million compared to $6.6 million in the prior year quarter.
The increase reflects primarily incremental revenue contributions from cannabis operator True Harvest compared to the prior year period, which only included contributions from Connecticut-based Theraplant.
READ: The Greenrose Holding Company appoints new chief financial officer, as well as a new director to its board
Mickey Harley, CEO of Greenrose, said, "During the second quarter, we continued to strengthen our operational foundation in both Connecticut and Arizona. Our revenues increased 40% year-over-year due to incremental contributions from True Harvest, where we substantially reduced our inventory backlog and generated sequential month-over-month sales improvements.”
Arizona-based True Harvest opened its seventh and eights grow rooms, and has overcome some of the post-harvest bottlenecks it experienced in 1Q, according to Greenrose.
Theraplant continued to navigate demand headwinds within the state's current medical market, but worked to further activate Greenrose’s increased cultivation capacity and build inventory ahead of Connecticut's expected commencement of recreational cannabis sales, said Greenrose.
“While we continued to incur higher costs associated with ramping our expanded cultivation capacity at both True Harvest and Theraplant, we believe this work improves our positioning for improving our operations in Arizona and preparing for Connecticut's forthcoming recreational market, respectively,” said Harley.
Adjusted EBITDA (or earnings before interest, tax, depreciation and amortization) came in at US$3.1 million compared to $4.6 million in the prior year quarter, which the company said was primarily driven by lower gross profit generated during the quarter, higher corporate general and administrative expenses, and costs related to ramping up production capacity at Theraplant and True Harvest.
Paul "Otto" Wimer, chief business officer of Greenrose, said that subsequent to the second quarter, the company announced two new key leadership additions.
“We appointed Benjamin Rose to our board of directors, effective August 1, 2022, and named Bernard Wang as our new chief financial officer, effective August 8, 2022. Rose and Wang bring over 25 years of experience in finance and investments, and public accounting and management, respectively, including strong public company and cannabis industry experience,” Wimer said.
Due to regulatory delays surrounding the expected timing of Connecticut's recreational cannabis market, Greenrose is suspending its previously stated full year 2022 guidance. The company expects to re-evaluate and provide further updates on its 2022 outlook as regulatory visibility improves.
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