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Ayr Wellness Reports Third Quarter 2022 Results

Ayr Wellness Inc.
Ayr Wellness Inc.

- Revenue up 24% Y/Y to $119.6 million, up 9% sequentially -

- Adjusted EBITDA up 10% sequentially to $21.7 million -

- Operating Loss improved 17% sequentially -

MIAMI, Nov. 10, 2022 (GLOBE NEWSWIRE) -- Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) (“Ayr” or the “Company”), a leading vertically integrated U.S. multi-state cannabis operator (“MSO”), is reporting financial results for the third quarter ended September 30, 2022. Unless otherwise noted, all results are presented in U.S. dollars.

Jonathan Sandelman, Founder and CEO of Ayr, said, “Ayr executed on its growth and profitability objectives during the third quarter, with our financial results largely in line with expectations. We grew retail market share in 6 of the 7 states where we operate, and while economic headwinds and inflationary pressures continued to impact the consumer wallet throughout the quarter, we maintained strong unit volumes across nearly all of our markets, demonstrating the defensibility of cannabis as a consumer staple.

“Talent remains a focus point for Ayr as we continue to optimize our existing foundation, as reflected in our hiring of David Goubert as Ayr’s first President. David brings decades of retail, customer experience, and supply chain expertise to our team. We’re also happy to announce that the Board of Directors has named Joyce Johnson-Miller as the Company’s Lead Independent Director, further strengthening our corporate governance.

“Looking ahead, we anticipate further growth from the optimization and ramping of our existing asset base, as well as a number of new catalysts that we expect to begin contributing by early next year. The closing of our acquisition of two Dispensary 33 retail locations in Illinois, the opening of 15+ new Florida stores, the commencement of sales from our state-of-the-art cultivation facility in Ohio, and the continued phased openings of our Massachusetts cultivation expansion will be key growth and profitability drivers in 2023. With these optimizations and catalysts, we believe we are well positioned to realize further earnings potential in our business in the coming year.”

Third Quarter Financial Highlights ($ in millions, excl. margin items)

 

Q3 2021

Q2 2022

Q3 2022

% Change
Q3/Q3

% Change
Q3/Q2

Revenue

$96.2

 

$110.1

 

$119.6

 

24.4

%

8.6

%

Gross Profit

$40.1

 

$40.3

 

$49.5

 

23.5

%

22.9

%

Adjusted Gross Profit1

$56.6

 

$57.2

 

$62.9

 

11.0

%

9.9

%

Operating Loss

$(8.9

)

$(24.8

)

$(20.7

)

NA

 

NA

 

Adjusted EBITDA1

$26.0

 

$19.6

 

$21.7

 

-16.7

%

10.3

%

Adjusted EBITDA Margin1

 

27.0

%

 

17.8

%

 

18.1

%

-890bps

 

30bps

 

1Adjusted EBITDA, Adjusted Gross Profit and Adjusted EBITDA Margin are non-GAAP measures, and accordingly are not standardized measures and may not be comparable to similar measures used by other companies. See Definition and Reconciliation of Non-GAAP Measures below. For a reconciliation of Operating Loss to Adjusted EBITDA as well as Gross Profit to Adjusted Gross Profit, see the reconciliation table appended to this release.

Third Quarter and Recent Highlights

  • Retail Updates

    • Opened two Greater Boston adult-use dispensaries in the heart of Boston’s Back Bay and Watertown.

    • Opened two new dispensaries in Florida during the third quarter and an additional two stores in November, bringing Ayr’s total footprint to 52 dispensaries across the state.

  • Brand/Product Updates

    • Introduced Lost in Translation (LIT), an award-winning cannabis brand known for sought after genetics and terpene profiles, in Massachusetts, Florida, Pennsylvania, New Jersey and Arizona.

    • Introduced HAZE live resin concentrates and vapes across the Company’s footprint in Florida and Nevada.

    • Launched Levia water-soluble tinctures in Arizona and Nevada in August, representing the first expansion of Levia outside of Massachusetts.

    • Introduced Secret Orchard vapes in Nevada.

  • Regulatory Updates

    • Received state regulatory approval to convert Ayr’s Somerville, Massachusetts medical dispensary to adult use, pending local approvals.

    • Received state regulatory approval to begin phased production at Ayr’s new cultivation expansion in Massachusetts.

    • Connecticut Cultivation Solutions, an entity co-owned by Tiana Hercules Esq., a Hartford City Councilwoman, and Ayr, was awarded a provisional Disproportionately Impacted Area (“DIA”) cultivator license in Connecticut.

Financing and Capital Structure

The Company deployed $7.9 million of capital expenditures in Q3 and ended the quarter with a cash balance of $100.8 million.

As of September 30, 2022, the Company had approximately 71.3 million fully diluted shares outstanding based on a treasury method calculation as of that date.i

Outlook

Based on the results to date coupled with an uncertain macroeconomic backdrop, management is updating their assumptions underlying its previously issued guidance. Consistent with prior quarter sequential growth trends, the Company expects Adjusted EBITDA and Operating Income to grow approximately 10% sequentially from Q3 2022 to Q4 2022 and expects further growth in 2023 as future milestones come online. This guidance assumes further price compression in the wholesale and retail market. Ayr’s expectations for future results are based on the assumptions and risks detailed in its MD&A for the period ended September 30, 2022 as filed on SEDAR and with the SEC.

i Includes pending M&A and excludes Ayr granted but unvested service-based LTIP shares totaling 6.0 million.

Conference Call

Ayr management will host a conference call, followed by a question-and-answer period.

Conference Call Date: Thursday, November 10, 2022
Time: 8:30 a.m. Eastern time
Toll-free dial-in number: (800) 319-4610
International dial-in number: (604) 638-5340
Conference ID: 10020429

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact the Company’s investor relations team at AYR@elevate-ir.com.

The conference call will be broadcast live and available for replay here.

A telephonic replay of the conference call will also be available for one month beginning at 11:30 a.m. ET on Thursday, November 10, 2022.

Toll-free replay number: (855) 669-9658
International replay number: (412) 317-0088
Replay ID: 9502

Financial Statements

Certain financial information reported in this news release is extracted from Ayr’s Unaudited Interim Condensed Consolidated Financial Statements and MD&A for the three and nine months ended September 30, 2022 and 2021. Ayr files its financial statements and MD&A on SEDAR and with the SEC. All financial information contained in this news release is qualified in its entirety by reference to such financial statements and MD&A.

Definition and Reconciliation of Non-GAAP Measures

The Company reports certain non-GAAP measures that are used to evaluate the performance of its businesses and the performance of their respective segments, as well as to manage their capital structures. As non-GAAP measures generally do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. Securities regulators require such measures to be clearly defined and reconciled with their most comparable GAAP measures.

Rather, these are provided as additional information to complement those GAAP measures by providing further understanding of the results of the operations of the Company from management’s perspective. Accordingly, these measures should not be considered in isolation, nor as a substitute for analysis of the Company’s financial information reported under GAAP. Non-GAAP measures used to analyze the performance of the Company’s businesses include “Adjusted EBITDA” and “Adjusted Gross Profit.”

The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performances and may be useful to investors because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. These financial measures are intended to provide investors with supplemental measures of the Company’s operating performances and thus highlight trends in the Company’s core businesses that may not otherwise be apparent when solely relying on the GAAP measures.

Adjusted EBITDA

“Adjusted EBITDA” represents (loss) income from operations, as reported under GAAP, before interest and tax, adjusted to exclude other adjustments associated with non-core costs, other non-cash items, including depreciation and amortization, and further adjusted to remove non-cash stock-based compensation, the accounting for the incremental costs to acquire cannabis inventory in a business combination, acquisition related costs, start-up costs and the gain (loss) on the sale of assets.

Adjusted Gross Profit

“Adjusted Gross Profit” represents gross profit, as reported, adjusted to exclude other adjustments associated with non-core costs, the accounting for the incremental costs to acquire cannabis inventory in a business combination, interest, depreciation and amortization and start-up costs.

A reconciliation of how Ayr calculates Adjusted EBITDA and Adjusted Gross Profit is provided in the tables appended below. Additional reconciliations of Adjusted EBITDA, Adjusted Gross Profit and other disclosures concerning non-GAAP measures are provided in our MD&A for the three and nine months ended September 30, 2022 and 2021.

Forward-Looking Statements

Certain information contained in this news release may be forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are often, but not always, identified by the use of words such as “target”, “expect”, “anticipate”, “believe”, “foresee”, “could”, “would”, “estimate”, “goal”, “outlook”, “intend”, “plan”, “seek”, “will”, “may”, “tracking”, “pacing” and “should” and similar expressions or words suggesting future outcomes. This news release includes forward-looking information and statements pertaining to, among other things, Ayr’s future growth plans. Numerous risks and uncertainties could cause the actual events and results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: anticipated strategic, operational and competitive benefits may not be realized; events or series of events, including in connection with COVID-19, may cause business interruptions; required regulatory approvals may not be obtained in a timely manner or at all; inflationary pressures may increase input costs; supply chain issues may hamper production and distribution; and Ayr may not be able to raise additional debt or equity capital if required. Among other things, Ayr has assumed that its businesses will operate as anticipated and that all required regulatory approvals will be obtained on satisfactory terms and within expected time frames.

Forward-looking estimates and assumptions involve known and unknown risks and uncertainties that may cause actual results to differ materially. While Ayr believes there is a reasonable basis for these assumptions, such estimates may not be met. These estimates represent forward-looking information. Actual results may vary and differ materially from the estimates.

Assumptions and Risks

Forward-looking information in this release is subject to the assumptions and risks as described in our MD&A for the three and nine months ended September 30, 2022.

Additional Information

For more information about the Company’s Q3 2022 operations and outlook, please view Ayr’s corporate presentation posted in the Investors section of the Company’s website at www.ayrwellness.com.

About Ayr Wellness Inc.

Ayr is an expanding vertically integrated, U.S. multi-state cannabis operator. Based on the belief that everything starts with the quality of the plant, the Company’s mission is to cultivate the finest quality cannabis at scale and deliver remarkable experiences to its customers every day.

Ayr’s leadership team brings proven expertise in growing successful businesses through disciplined operational and financial management, and is committed to driving positive impact for customers, employees and the communities they serve. For more information, please visit www.ayrwellness.com.

Company/Media Contact:

Robert Vanisko
VP, Corporate Communications
T: (786) 885-0397
Email: robert.vanisko@ayrwellness.com

Investor Relations Contact:

Sean Mansouri, CFA
Elevate IR
T: (720) 330-2829
Email: IR@ayrwellness.com



Ayr Wellness Inc.
Unaudited Interim Consolidated Balance Sheets
(Expressed in United States Dollars, in thousands, except share amounts)

 

 

 

 

 

 

September 30, 2022

 

December 31, 2021

 

ASSETS

 

Current

 

 

 

Cash

$

100,762

 

$

154,342

 

 

Accounts receivable, net

 

9,087

 

 

7,413

 

 

Inventory

 

113,069

 

 

93,363

 

 

Prepaid expenses, deposits, and other current assets

 

8,635

 

 

10,949

 

 

Total Current Assets

 

231,553

 

 

266,067

 

Non-current

 

 

 

Property, plant, and equipment, net

 

315,381

 

 

275,222

 

 

Intangible assets, net

 

956,855

 

 

978,915

 

 

Right-of-use assets - operating, net

 

138,653

 

 

88,721

 

 

Right-of-use assets - finance, net

 

45,166

 

 

17,527

 

 

Goodwill

 

242,579

 

 

229,910

 

 

Deposits and other assets

 

8,557

 

 

3,550

 

TOTAL ASSETS

$

1,938,744

 

$

1,859,912

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Liabilities

 

 

Current

 

 

 

Trade payables

$

21,784

 

$

26,983

 

 

Accrued liabilities

 

24,221

 

 

32,724

 

 

Lease liabilities - operating - current portion

 

7,921

 

 

4,195

 

 

Lease liabilities - finance - current portion

 

9,583

 

 

3,185

 

 

Contingent consideration - current portion

 

90,861

 

 

39,868

 

 

Purchase consideration payable

 

2,166

 

 

812

 

 

Income tax payable

 

32,777

 

 

28,915

 

 

Debts payable - current portion

 

34,213

 

 

8,112

 

 

Accrued interest payable - current portion

 

10,109

 

 

7,542

 

 

Total Current Liabilities

 

233,635

 

 

152,336

 

Non-current

 

 

 

Deferred tax liabilities, net

 

67,954

 

 

70,081

 

 

Lease liabilities - operating - non-current portion

 

136,046

 

 

87,767

 

 

Lease liabilities - finance - non-current portion

 

26,060

 

 

9,406

 

 

Construction finance liabilities

 

35,616

 

 

-

 

 

Contingent consideration - non-current portion

 

28,699

 

 

145,654

 

 

Debts payable - non-current portion

 

174,443

 

 

125,746

 

 

Senior secured notes, net of debt issuance costs

 

244,864

 

 

245,408

 

 

Accrued interest payable - non-current portion

 

4,430

 

 

3,451

 

TOTAL LIABILITIES

 

951,747

 

 

839,849

 

 

 

 

 

Shareholders' equity

 

 

 

Multiple Voting Shares - no par value, unlimited authorized. Issued and outstanding - 3,696,486 shares

 

-

 

 

-

 

 

Subordinate, Restricted, and Limited Voting Shares - no par value, unlimited authorized. Issued and outstanding - 59,023,822 and 56,337,175 shares, respectively

 

-

 

 

-

 

 

Exchangeable Shares: no par value, unlimited authorized. Issued and outstanding - 7,068,270 and 7,368,285 shares, respectively

 

-

 

 

-

 

 

Additional paid-in capital

 

1,332,770

 

 

1,289,827

 

 

Treasury stock - 645,300 and 568,300 shares, respectively

 

(8,987

)

 

(7,828

)

 

Accumulated other comprehensive income

 

3,266

 

 

3,266

 

 

Accumulated Deficit

 

(347,253

)

 

(265,202

)

 

Equity of Ayr Wellness Inc.

 

979,796

 

 

1,020,063

 

 

Noncontrolling interest

 

7,201

 

 

-

 

TOTAL SHAREHOLDERS' EQUITY

 

986,997

 

 

1,020,063

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,938,744

 

$

1,859,912

 

 

 

 

 



Ayr Wellness Inc.
Unaudited Interim Condensed Consolidated Statements of Operations
(Expressed in United States Dollars, in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 2022

 

September 30, 2021

 

 

September 30, 2022

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

Revenues, net of discounts

$

119,639

 

$

96,189

 

 

$

340,996

 

$

245,839

 

 

 

 

 

 

 

 

 

 

Cost of goods sold excluding fair value items

 

69,642

 

 

47,084

 

 

 

199,455

 

$

117,567

 

 

Incremental costs to acquire cannabis inventory in a business combination

 

486

 

 

9,022

 

 

 

6,216

 

$

41,411

 

 

Cost of goods sold

 

70,128

 

 

56,106

 

 

 

205,671

 

 

158,978

 

 

 

 

 

 

 

 

 

 

Gross profit

 

49,511

 

 

40,083

 

 

 

135,325

 

 

86,861

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Selling, general, and administrative

 

52,981

 

 

37,297

 

 

 

154,907

 

$

96,922

 

 

 

Depreciation and amortization

 

14,440

 

 

10,943

 

 

 

42,078

 

 

26,925

 

 

 

Acquisition expense

 

965

 

 

743

 

 

 

5,139

 

 

5,164

 

 

 

Loss (gain) on sale of assets

 

1,810

 

 

-

 

 

 

(190

)

 

-

 

 

Total operating expenses

 

70,196

 

 

48,983

 

 

 

201,934

 

 

129,011

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(20,685

)

 

(8,900

)

 

 

(66,609

)

 

(42,150

)

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

 

Share of loss on equity investments

 

-

 

 

(13

)

 

 

-

 

 

(32

)

 

 

Fair value gain on financial liabilities

 

1,658

 

 

19,267

 

 

 

33,438

 

 

30,812

 

 

 

Interest expense, net

 

(7,838

)

 

(4,281

)

 

 

(22,179

)

 

(10,852

)

 

 

Interest income

 

12

 

 

37

 

 

 

52

 

 

160

 

 

 

Other, net

 

13

 

 

517

 

 

 

13

 

 

955

 

 

Total other income (expense), net

 

(6,155

)

 

15,527

 

 

 

11,324

 

 

21,043

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes and noncontrolling interests

 

(26,840

)

 

6,627

 

 

 

(55,285

)

 

(21,107

)

 

 

 

 

 

 

 

 

 

Income Taxes

 

 

 

 

 

 

 

Current tax provision

 

(12,020

)

 

(14,167

)

 

 

(33,712

)

 

(29,986

)

 

 

Deferred tax benefit

 

1,433

 

 

4,161

 

 

 

2,128

 

 

10,353

 

 

Total income taxes

 

(10,587

)

 

(10,006

)

 

 

(31,584

)

 

(19,633

)

 

 

 

 

 

 

 

 

 

Net loss before noncontrolling interest

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

(37,427

)

 

(3,379

)

 

 

(86,869

)

 

(40,740

)

 

 

Net loss attributable to Ayr Wellness Inc.

 

(1,310

)

 

-

 

 

 

(4,818

)

 

-

 

 

 

 

$

(36,117

)

$

(3,379

)

 

$

(82,051

)

$

(40,740

)

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

$

(0.52

)

$

(0.06

)

 

$

(1.2

)

$

(0.76

)

 

Weighted average number of shares outstanding (basic and diluted)

 

69,087

 

 

59,566

 

 

 

68,391

 

 

53,952

 

 

 

 

 

 

 

 

 

 


Ayr Wellness Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(Expressed in United States Dollars, in thousands)

 

 

 

 

 

 

Nine Months Ended

 

 

September 30, 2022

 

September 30, 2021

 

 

Operating activities

 

 

 

Net loss before noncontrolling interest

 

(86,869

)

 

(40,740

)

 

Adjustments for:

 

 

 

Fair value gain on financial liabilities

 

(33,438

)

 

(30,812

)

 

Stock-based compensation

 

28,652

 

 

20,388

 

 

Stock-based compensation - related parties

 

707

 

 

-

 

 

Depreciation and amortization

 

13,894

 

 

5,296

 

 

Amortization on intangible assets

 

53,660

 

 

32,528

 

 

Share of loss on equity investments

 

-

 

 

32

 

 

Gain on disposal of equity investments

 

-

 

 

(1,000

)

 

Gain (loss) on disposal of property, plant, and equipment

 

(190

)

 

51

 

 

Incremental costs to acquire cannabis inventory in a business combination

 

6,216

 

 

41,411

 

 

Deferred tax benefit

 

(2,128

)

 

(10,353

)

 

Amortization on financing costs

 

1,719

 

 

1,229

 

 

Amortization on financing premium

 

(2,263

)

 

-

 

 

Changes in operating assets and liabilities, net of business combinations:

 

 

 

Accounts receivable

 

(1,127

)

 

(5,750

)

 

Inventory

 

(16,267

)

 

(37,743

)

 

Prepaid expenses, deposits, and other current assets

 

1,200

 

 

14

 

 

Trade payables

 

(5,036

)

 

2,377

 

 

Accrued liabilities

 

(2,729

)

 

2,780

 

 

Interest accrued

 

3,547

 

 

3,927

 

 

Lease liabilities - operating

 

1,887

 

 

1,294

 

 

Income tax payable

 

3,862

 

 

(7,116

)

 

Cash used in operating activities

 

(34,703

)

 

(22,186

)

 

 

 

 

 

Investing activities

 

 

 

Purchase of property, plant, and equipment

 

(58,848

)

 

(53,062

)

 

Capitalized interest

 

(10,858

)

 

(5,570

)

 

Proceeds from the sale of assets, net of transaction costs

 

31,433

 

 

-

 

 

Cash paid for business combinations and asset acquisitions, net of cash acquired

 

(11,469

)

 

(59,972

)

 

Cash paid for business combinations and asset acquisitions, bridge financing

 

-

 

 

(22,750

)

 

Cash paid for business combinations and asset acquisitions, working capital

 

(2,812

)

 

(4,025

)

 

Payments for interests in equity accounted investments

 

-

 

 

(47

)

 

Cash received in disposal of equity investment

 

-

 

 

1,000

 

 

Advances to related corporation

 

-

 

 

135

 

 

Purchase of intangible asset

 

(4,000

)

 

-

 

 

Cash received (paid) for bridge financing

 

1,070

 

 

(1,200

)

 

Deposits for business combinations, net of cash on hand

 

(2,826

)

 

(572

)

 

Cash used in investing activities

 

(58,309

)

 

(146,063

)

 

 

 

 

 

Financing activities

 

 

 

Proceeds from exercise of warrants

 

-

 

 

56,034

 

 

Proceeds from exercise of options

 

300

 

 

305

 

 

Proceeds from financing transaction, net of financing costs

 

27,599

 

 

-

 

 

Proceeds from equity offering, net of expenses

 

-

 

 

118,053

 

 

Proceeds from issuance of notes payable, net of financing costs

 

51,713

 

 

-

 

 

Payments of financing costs

 

-

 

 

(136

)

 

Payment for settlement of contingent consideration

 

(10,000

)

 

-

 

 

Deposits paid for financing lease and note payable

 

(924

)

 

-

 

 

Tax withholding on stock-based compensation awards

 

(4,738

)

 

(28,511

)

 

Repayments of debts payable

 

(8,257

)

 

(6,280

)

 

Repayments of lease liabilities - finance (principal portion)

 

(7,830

)

 

(3,741

)

 

Repurchase of equity shares

 

(8,430

)

 

(311

)

 

Cash provided by financing activities

 

39,432

 

 

135,413

 

 

 

 

 

 

Net decrease in cash

 

(53,580

)

 

(32,836

)

 

Cash, beginning of the period

 

154,342

 

 

127,238

 

 

Cash, end of the period

$

100,762

 

$

94,402

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

Interest paid during the period

 

30,747

 

 

12,187

 

 

Income taxes paid during the period

 

29,248

 

 

37,999

 

 

Non-cash investing and financing activities:

 

 

 

Recognition of right-of-use assets for operating leases

 

52,296

 

 

61,629

 

 

Recognition of right-of-use assets for finance leases

 

30,812

 

 

13,365

 

 

Issuance of promissory note related to business combinations

 

16,000

 

 

-

 

 

Issuance of Equity Shares related to business combinations and asset acquisitions

 

6,352

 

 

556,720

 

 

Issuance of Equity Shares related to equity component of debt

 

-

 

 

7,430

 

 

Issuance of Equity Shares related to settlement of contingent consideration

 

11,748

 

 

-

 

 

Issuance of promissory note related to settlement of contingent consideration

 

14,934

 

 

-

 

 

Cancellation of Equity Shares

 

78

 

 

-

 

 

Capital expenditure disbursement for cultivation facility

 

7,837

 

 

-

 

 

 

 

 

 



Ayr Wellness Inc. Unaudited Interim Consolidated Adjusted EBITDA and Gross Profit Reconciliation(Expressed in United States Dollars, in thousands)

 

 

 

 

 

 

Three Months Ended

Nine Months Ended

 

September 30, 2022

 

September 30, 2021

 

September 30, 2022

 

September 30, 2021

 

 

$

 

$

 

$

 

$

 

Loss from operations (GAAP)

(20,685

)

(8,900

)

(66,609

)

(42,150

)

 

 

 

 

 

Incremental costs to acquire cannabis inventory in a business combination

486

 

9,022

 

6,216

 

41,411

 

Interest (within cost of goods sold "COGS")

1,723

 

464

 

2,975

 

921

 

Depreciation and amortization (from statement of cash flows)

23,743

 

15,761

 

67,554

 

37,825

 

Acquisition costs

965

 

743

 

5,139

 

5,164

 

Stock-based compensation, non-cash

9,359

 

5,013

 

29,448

 

20,388

 

Start-up costs1

2,930

 

3,464

 

9,442

 

6,437

 

Other2

1,337

 

433

 

6,835

 

1,841

 

Loss (gain) on sale of assets

1,810

 

-

 

(190

)

-

 

 

42,353

 

34,900

 

127,419

 

113,987

 

 

 

 

 

 

Adjusted EBITDA (non-GAAP)

21,668

 

26,000

 

60,810

 

71,837

 

 

 

 

 

 

 

 

 

 

 

1Costs to prepare a location for its intended use, including facilities not yet operating at scale. Start-up costs are expensed as incurred and are not indicative of ongoing operations.

2Other non-core costs including non-operating adjustments and non-cash inventory write-downs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Nine Months Ended

 

September 30, 2022

 

September 30, 2021

 

September 30, 2022

 

September 30, 2021

 

 

$

 

$

 

$

 

$

 

Gross profit (GAAP)

49,511

 

40,083

 

135,325

 

86,861

 

 

 

 

 

 

Incremental costs to acquire cannabis inventory in a business combination

486

 

9,022

 

6,216

 

41,411

 

Interest (within COGS)

1,723

 

464

 

2,975

 

921

 

Depreciation and amortization (within COGS)

9,303

 

4,818

 

25,475

 

10,900

 

Start-up costs (within COGS)

1,020

 

2,250

 

3,153

 

3,834

 

Other (within COGS)

830

 

-

 

4,883

 

-

 

 

 

 

 

 

Adjusted Gross Profit (non-GAAP)

62,873

 

56,637

 

178,027

 

143,927