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Verano Announces 3Q 2022 Financial Results

The company’s third quarter 2022 revenue increased 2% versus the prior quarter and 10% year-over-year to $228 million.


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CHICAGO, Nov. 14, 2022 – PRESS RELEASE – Verano Holdings Corp., a leading multistate cannabis company, announced its financial results for the third quarter ended Sept. 30, 2022 (Q3 2022), which were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Comparable numbers for the third quarter ended Sept. 30, 2021, were also prepared in accordance with U.S. GAAP.

2022 Third Quarter Financial Highlights

  • Q3 2022 revenue increased 2% versus the prior quarter and 10% year-over-year to $228 million.
    • Revenue growth versus the year-ago period was driven by strength from adult-use sales in New Jersey.
  • Q3 2022 gross profit was $123 million or 54% of revenue, compared to $98 million or 44% of revenue in the prior quarter, and $98 million or 48% of revenue in the third quarter 2021.
    • Gross profit growth versus the year-ago period was driven by top-line growth and a lower comparative impact related to the inventory step-up from acquisitions.
  • Q3 2022 SG&A was $86 million or 38% of revenue, compared to $100 million or 45% of revenue in the prior quarter, and $76 million or 37% of revenue in the third quarter 2021.
    • SG&A growth versus the year-ago period was primarily driven by an increase in retail locations.
  • Q3 2022 net loss was $(43) million, compared to a loss of $(10) million in the prior quarter, and $(13) million in the year-ago period.
  • Adjusted EBITDA was $82 million or 36% of revenue, compared to Adjusted EBITDA of $76 million or 34% of revenue in the prior quarter.
  • Cash flow from operations for the nine months ended Sept. 30, 2022, was $65 million.

2022 Third Quarter Operational Highlights

  • Furthered Florida retail expansion by opening 11 new MÜV dispensaries across the state throughout the quarter.
  • Opened new Zen Leaf dispensaries in Wheeling and Clarksburg, W.Va., and New Kensington, Pa.; relocated Zen Leaf Jessup to Elkridge in Maryland to optimized location and retail space; maximized New Jersey footprint with the commencement of adult-use sales at Zen Leaf Neptune on the Jersey Shore.
  • Launched Verano signature flower branded products in four new core markets—Arizona, Florida, Massachusetts and Pennsylvania; Verano signature flower branded products are now distributed to more than 500 dispensaries across nine states, including more than 100 of the company’s retail locations.
  • Introduced Savvy, a new flower and extract brand featuring larger-format cannabis products that caters to more value-oriented patients and consumers, across seven core markets.
  • Inked licensing agreement with Mike Tyson's Tyson 2.0 cannabis company to launch legendary wrestler Ric Flair's new cannabis line, Ric Flair Drip Cannabis, across 11 markets.
  • Welcomed Lawrence Hirsh as a new member of the board of directors and chair of the Audit Committee.
  • Completed acquisition of Sierra Well, bolstering Nevada footprint with addition of two operating dispensaries and an active cultivation facility.
  • Initiated second annual Breast Cancer Awareness Month donation effort benefiting the Lynn Sage Breast Cancer Foundation.

Subsequent Operational Highlights

  • Refinanced $350-million credit facility with enhanced flexibility to reduce capital costs.
  • Opened two new MÜV dispensary locations in Panama City Beach and Port Orange, Florida, raising the company's Florida retail footprint to 61 locations.
  • Launched BITS, a new brand and product line consisting of five unique flavors of low-dose, high-function edibles that blend THC, cannabinoids and adaptogens, appealing to cannabis enthusiasts of all experience levels.
  • Active operations span 13 states, comprised of 119 dispensaries and 14 cultivation and processing facilities with more than 1 million square feet of cultivation capacity. 

Management Commentary

“I am very pleased with our performance in the third quarter and how our team demonstrated focus and adaptability in driving our business forward in an increasingly challenging environment,” Verano founder, Chairman and CEO George Archos said. “In the face of economic headwinds, industry dynamics and legislative uncertainty, we delivered revenue growth and strong Adjusted EBITDA margins, underscoring our focus on superior operations and efficiency. We significantly bolstered our growing product portfolio by scaling our signature Verano brand across core markets, introducing our value flower and extract brand Savvy, launching Ric Flair’s Ric Flair Drip Cannabis line in partnership with Tyson 2.0, and most recently, releasing a low-dose, high-function edibles line, BITS, which combine tailored adaptogens with cannabinoids and 5 mg of THC to appeal to a broad base of cannabis consumers. We also continue to see positive results in New Jersey, where we’ve further cemented our position as a market leader, evidenced by our strong retail performance and growing wholesale business. Finally, we are also pleased to have completed the refinancing of our $350 million credit facility, which gives us flexibility in our capital structure and the ability to reduce our cost of capital. I remain optimistic and confident in our business as we continue to maintain focus on driving operational quality and efficiency as we further position Verano for future growth.”

Balance Sheet and Liquidity

As of Sept. 30, 2022, the company’s current assets were $295 million, including cash and cash equivalents of $76 million. The company had working capital deficit of $(89) million and total debt, net of issuance costs, of $392 million.

The company’s total Class A subordinate voting shares outstanding, including Class B proportionate voting shares on an as-converted to Class A subordinate voting share basis, was 336,162,222 as of Sept. 30, 2022.

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