Like so many other struggling marijuana companies that don’t have much of a positive nature to report about their latest quarterly financial and operational performance management often hypes how well they are doing compared to the same period a year ago instead of the previous quarter. That is exactly what the management of Vireo Health International, Inc. (CSE:VREO; OTCQX:VREOF), has done in their latest abysmal financial report (Q3 for the period ended September 30/19) released on Wednesday morning masking how poorly their company is currently performing. This article corrects that misdirection.
By Lorimer Wilson
Q3 2020 Financial Highlights vs. Q2 (All currency amounts are in USDs)
- Total Revenue: INCREASED by 11.1% to $8.0M
- Gross Profit: DECREASED by 48.0% to $1.3M
- Operating Expenses: INCREASED by 53.6%
- S,G&A Expenses: INCREASED by 68%
- Net Profit: DECREASED to ($14.6M) from a profit of $1.9M
- EBITDA: DECREASED to ($15.5M) from $0.8M
- Adj. EBITDA: DECREASED to ($5.9M) from $2.3M
Q3 Balance Sheet Notables
- Current Assets: DECREASED 25%
- Cash on Hand: DECREASED 45.9% to $16.4M
- Planned operational dispensaries REDUCED to 13 from previous targeted range of 16 to 20.
Press Release Comments By Vireo’s Founder & CEO, Kyle Kingsley, M.D.
- “Despite the near-term challenges our industry is facing, we believe Vireo is in a unique position to emerge as a true sector leader given the relative strength of our balance sheet compared to many of our peers.
- With virtually no debt, we control our own destiny and our lean operations and disciplined approach to capital allocation provide us a clear path to profitability.
- We have an extremely attractive collection of licenses and strategic assets with significant long-term potential, and
- we’re looking forward to better showcasing the strength of our portfolio next year.”
- cultivates cannabis in environmentally friendly greenhouses,
- manufactures pharmaceutical-grade cannabis extracts,
- sells its products at both company-owned and third-party dispensaries,
- is currently licensed in 11 markets (Arizona, Maryland, Massachusetts, Minnesota, New Mexico, New York, Nevada, Ohio, Pennsylvania, Puerto Rico, and Rhode Island and
- generated operating revenue in 7 states during Q3, namely: Arizona, Maryland, Minnesota, New Mexico, New York, Ohio, and Pennsylvania.
As you will note from the above, VIREO’s stock prices has been in a relentless decline since being listed on the OTC (-75%) and declined 7.81% today in a negative reaction to their Q3 reported results. For the sake of comparison, the American MSOs have gone down 65%, on average, during the same period. Let’s hope that Dr. Kingsley’s guidance statement above that they are “looking forward to better showcasing the strength of our portfolio next year” comes to fruition.