TILT Holdings Inc. (NEO: TILT) (OTCQX:TLLTF), reported its financial and operating results late Monday for the three months and nine months ended September 30, 2022.
Q3 2022 Financial Summary
- Revenue was $40.5 million in the three months ended September 30, 2022, compared to $53.4 million in the prior year period.
- Gross profit was $9.5 million in the three months ended September 30, 2022, or approximately 24% of revenue, compared to $12.6 million, or approximately 24% of revenue in the prior year period.
- Net loss for the quarter was $15.7 million in the three months ended September 30, 2022, compared to a net income of $1.0 million in the prior year period.
- Adjusted EBITDA was $0.6 million in the three months ended September 30, 2022, compared to $5.0 million in the prior year period.
- Year-to-date cash provided by operations was up significantly to $8.3 million, compared to cash used of $3.9 million in the prior year.
- The total cash balance on September 30, 2022, was $16.6 million compared to $7.0 million on December 31, 2021. This cash balance included restricted cash of $10.0 million on September 30, 2022, compared to restricted cash of $2.7 million on December 31, 2021.
“The macro-economic challenges facing operators in the cannabis sector have been well documented over the course of 2022,” said CEO Gary Santo. “Macroeconomic pressures have affected consumer spending habits and both retail and wholesale pricing volatility has been exacerbated by cannabis supply and demand imbalances occurring in key markets such as Massachusetts and Pennsylvania."
Recent Financing Update: Entered into amendments to the senior secured promissory notes held by certain senior debt noteholders totaling $9.6 million in principal amount to extend the maturity date from November 14, 2022, to December 31, 2022.
Q3 2022 Operational Highlights
- Launched innovative self-care brand 1906 for patients across Pennsylvania, Toast and Highsman in Massachusetts.
- Received approval from the Massachusetts Cannabis Control Commission to commence operations for the medical use of marijuana at the Company’s 5,100 sq ft dispensary in Cambridge, Massachusetts.
- Won multiple awards during the quarter, including the cultivators' cup “Best Cannabis Partnership” at the annual Benzinga Cannabis Capital Conference which highlighted the Company’s partnership with the Shinnecock Indian Nation to develop cannabis operations on sovereign land.
Recent Operational Highlights: Announcing (...) multiple senior leadership updates, including the appointment of Dana Arvidson as Chief Financial Officer, Brad Hoch as Chief Accounting Officer, and Chris Kelly as Chief Revenue Officer, all effective December 6, 2022.
Launched Black Buddha Cannabis, a cannabis wellness brand owned by Black women and women throughout Massachusetts; and purpose-driven cannabis lifestyle brand Highsman for medical dispensaries in Pennsylvania under the Ricky Williams
2022 Financial Guidance
Due to the evolving macroeconomic environment, inflationary impacts on consumer spending, and lower cannabis wholesale pricing in Massachusetts and Pennsylvania, TILT is revising its 2022 financial outlook and now expects revenue to range between $175 – $180 million, with Adjusted EBITDA ranging between $5 – $6 million, according to the report.
“By year-end, we expect to have over 145 brand partner product offerings in the market, which together with our expanded hardware portfolio, should allow TILT to end the year on a strong note as we prepare to enter New York in 2023,” Santo added.
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