The Cannabist Co. Reports $511 Million in Revenue in 2023

NEW YORK, March 13, 2024 – PRESS RELEASE – The Cannabist Co. Holdings Inc., one of the largest and most experienced cultivators, manufacturers and retailers of cannabis products in the U.S., reported its financial and operating results for the fourth quarter and full year ended Dec. 31, 2023. All financial information presented in this release is in U.S. generally accepted accounting principles (GAAP) and in U.S. dollars, unless otherwise noted.

“In 2023, we successfully produced topline revenue of $511 million, consistent with the prior year, and implemented significant cost reduction programs that resulted in Adjusted EBITDA and net loss improvements over 2022,” The Cannabist Co. CEO David Hart said. “In addition, we further improved our capital structure through the retirement of $30.6 million of debt in the fourth quarter. It is a credit to the Cannabist team to have achieved these accomplishments during a year when we unwound the prior merger agreement.

“We began 2024 with renewed focus as The Cannabist Company. We are committed to continuously improving our operations and leveraging the investments that we have made in cultivation and manufacturing facilities by shifting the wholesale mix toward finished goods and engaging in strategic partnerships. We will continue to optimize our retail footprint and capitalize on the significant growth opportunities to come from markets transitioning to adult use. We remain committed to achieving long-term, sustainable margin improvement and cash flow generation, and we are intently focused on driving shareholder value over the mid-term. I am proud of our team’s incredible resilience and the inspiring passion for our business that will enable us to seize on the opportunities before us.”

Top 5 Markets by Revenue in Q4: Colorado, Maryland, New Jersey, Ohio, Virginia

Top 5 Markets by Adjusted EBITDA in Q4: Delaware, Maryland, New Jersey, Ohio, Virginia

Operational Highlights for Full Year and Fourth Quarter 2023

• In Q4, wholesale revenue increased 4% sequentially to $16.4 million, or 13% of total revenue. For the full year, wholesale represented 12% of total revenue.
• The year-end active retail count was 86 locations, as there were no new locations opened in Q4 2023. As of March 13, 2024, the active retail count is 85 across 15 markets, with the Utah divestiture having closed.
• In 2023, the company launched various new purpose-driven form factors of award-winning brands across the national portfolio, including AMBER Live Resin Concentrate in Virginia, Press Mango Lemonade Oral Dissolvable Tablets in New Jersey and Seed & Strain Distillate Vape in six markets.
• Announced strategic commercial partnerships with Old Pal and Airo Brands; expanded collaboration with ButACake, introducing products to the New Jersey market.
• In Q4 2023, the retail share of internal house brand sales increased to 51%, over 50% in Q3 2023.
• There are 36 Cannabist locations in the U.S., with additional openings planned in 2024 in Maryland (1), New Jersey (1), and Virginia (2).
  

Financial Highlights for Full Year and Fourth Quarter 2023

• The company ended the fourth quarter with $39.3 million in total cash, $3.5 million of which is restricted. The company paid down $30.6 million in senior debt during Q4: The company redeemed $25 million of 13% notes due May 2024 and paid off the $5.6 million outstanding pursuant to the convertible notes that matured in December 2023.
• Subsequent to the year-end, the company has further reduced leverage by exchanging $10 million of 6% senior secured notes due 2025 via an exchange agreement announced in January 2024.
• In Q4 2023, cash from operations was $9.4 million, compared to $1.8 million in Q3 2023, primarily a result of a deliberate inventory reduction strategy in the fourth quarter.
• Capital expenditures of $1.7 million in the fourth quarter; capital expenditures in 2024 are expected to remain in the range of $2 million to $3 million per quarter, largely for new store openings and manufacturing upgrades ahead of the anticipated growth of the wholesale program.
• In Q1 2024, the company closed on the divestiture of its Utah license and retail location for $6.5 million in gross proceeds.
  

View the company’s Q4 2023 and full-year 2023 balance sheet here.