4Front Ventures Corp. (CSE:FFNT) (OTCQX:FFNTF), a vertically integrated, multi-state cannabis operator and retailer, announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021.
Q4 2021 Highlights
- Systemwide Pro Forma Revenue increased 35% year-over-year, and remained flat sequentially, at $33.8 million
- GAAP revenue increased 68% year-over-year, and 10% sequentially to $28.5 million
- Adjusted EBITDA increased 160% year-over-year to $13.2 million
Full-Year 2021 Financial Highlights
- Systemwide Pro Forma Revenue increased 50% year-over-year to $132.7 million
- GAAP revenue increased 81% year-over-year to $104.6 million
- Adjusted EBITDA increased 479% year-over-year to $34.0 million (or 32.6% of revenue).
- Cash flow from operations increased to $7.4 million in FY 2021 as compared to a loss of $14.0 million in FY 2020.
- As of December 31, 2021, 4Front had $22.6 million of cash and $48.3 million of related-party, long-term debt not due until May 2024.
- As of March 30, 2022, 4Front has 627,826,303 subordinate voting shares outstanding.
‘Low-Cost Production At Scale’
"Our fourth-quarter results showed strong year-over-year growth, (...) reinforcing our thesis of consistent, low-cost production at scale," said Leo Gontmakher, CEO of 4Front. "The capabilities of our core operating footprint have increased by an order of magnitude with our 170,000 sq. ft. state-of-the-art production facility in Commerce, California up and running smoothly as designed."
"Our Commerce facility manufactures cannabis products at considerably low prices, allowing us to buy attractive brands in this highly-fragmented market and make them immediately accretive,” noted Gontmakher.
"Revenue growth in our Massachusetts operations will be greatly bolstered by the closing of the acquisition of New England Cannabis Corporation in late January, which more than doubled our total flowering canopy and nearly tripled our kitchen, processing, and distribution space. As the integration of NECC continues to ramp over the coming weeks, we are intent on further increasing the market penetration of our award-winning brands in the state in the near term," concluded the CEO.
Operational Highlights and Current Developments
In the fourth quarter of 2021, 4Front announced its proposed acquisition of NECC, which was subsequently completed in late January 2022.
“The acquisition of NECC's state-of-the-art 55,000 square foot cultivation and production facility significantly bolsters 4Front's strategic position in the core Massachusetts market and expands the company's institutional knowledge of lighting, airflow, and fertigation techniques,” reported the firm in a press release.
4Front's production facility in Commerce, California commenced operations in November 2021. The 170,000 square foot facility is designed for open-ended growth, with over $500 million of extensive manufacturing capacity.
In addition, 4Front signed a definitive agreement to acquire Island Cannabis Co., a leading California producer of pre-roll, flower, and concentrate products. The transaction represents the first California brand to join 4Front's platform and is expected to close in the second quarter of 2022.
"California is arguably one of the most competitive cannabis markets in the world. Leveraging 4Front's platform, operational efficiency and scale enable Island to follow through on its promise to deliver the discerning California consumer only the highest quality products and most innovative cannabis experiences," said Ray Landgraf, CEO of Island. "Once integrated into 4Front's Commerce facility, we can reduce production costs and scale volume of the Island Cannabis Co. brand. This will accelerate Island's growth by making a respected brand even more attractive to California retailers and consumers," added Gontmakher.
Finally, the ongoing construction of 4Front's 250,000 square foot cultivation and production facility in Matteson, Illinois is on track to be completed late in 2022 with operations beginning in 2023.
Andrew Thut, CIO & Interim CFO of 4Front Ventures will be one of the guest speakers at Benzinga Cannabis Capital Conference, where cannabis executives and entrepreneurs meet. Join live in Miami at the Fontainebleau Miami Beach on April 20-21, 2022, or tune in from anywhere using Benzinga's hybrid event software.
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Photo Courtesy of Lelen Ruete.
