On August 7, 2024, Verano Holdings Corp (VRNOF, Financial) released its 8-K filing detailing its financial results for the second quarter ended June 30, 2024. Verano Holdings Corp is a vertically integrated multi-state cannabis operator in the United States, with two reportable segments: cultivation (wholesale) and retail. The company's consumer brands include Encore, Avexia, MÃœV, Savvy, BITS, and Verano, while its retail dispensaries operate under brands such as Zen Leaf and MÃœV.
Performance and Challenges
Verano Holdings Corp reported revenues of $222 million for Q2 2024, a slight increase of 0.5% from the previous quarter but a 5% decrease year-over-year. This performance was slightly below the analyst estimate of $224.36 million. The decline in revenue compared to the same period last year was primarily due to expected declines in New Jersey retail as more dispensaries opened across the state. However, this was partially offset by increases in Maryland retail and wholesale due to the launch of the adult-use program in July 2023 and new Zen Leaf store openings in Connecticut.
Gross profit for the quarter was $114 million, representing 51% of revenue, which is consistent with the previous quarter but slightly down from $115 million in Q2 2023. The gross profit margin increased by over 220 basis points due to higher contributions from net wholesale revenue.
Financial Achievements
Despite the challenges, Verano Holdings Corp achieved an adjusted EBITDA of $71 million, or 32% of revenue, which is a key metric for evaluating the company's operational efficiency. The company also reported net cash provided by operating activities of $8 million and capital expenditures of $19 million for the quarter.
Income Statement Highlights
| ($ in thousands) | June 30, 2024 | March 31, 2024 | June 30, 2023 |
|---|---|---|---|
| Revenues, net of Discounts | $222,390 | $221,306 | $234,115 |
| Gross Profit | $114,340 | $112,960 | $115,191 |
| Income from Operations | $27,266 | $22,671 | $30,430 |
| Net Loss Attributable to Verano Holdings Corp. & Subsidiaries | $(21,764) | $(4,822) | $(13,061) |
| Adjusted EBITDA | $70,599 | $66,547 | $71,512 |
Balance Sheet and Liquidity
As of June 30, 2024, Verano Holdings Corp reported current assets of $358 million, including cash and cash equivalents of $130 million. The company had a working capital deficit of $(3) million and total debt, net of issuance costs, of $396 million. The total shareholders' equity stood at $1,221 million.
Management Commentary
"Our second quarter performance was strong, highlighted by proactive measures we executed to further bolster the business, including authorization of a share repurchase program, capex investments, and subsequent to quarter end, strategic M&A that upon closure, will grant us vertical access to the Virginia market ahead of adult use," said George Archos, Verano founder and Chief Executive Officer.
Operational Highlights
During the second quarter, Verano Holdings Corp expanded its retail footprint by opening new dispensaries in Florida and Connecticut. The company also launched the Cabbage Clubâ„¢, a nationwide proprietary multi-state cannabis membership club, in several states. Additionally, Verano announced a share repurchase authorization and entered into an agreement to acquire The Cannabist Company's Eastern Virginia and Arizona operations.
For more detailed financial information and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Verano Holdings Corp for further details.
