Verano’s revenue grew 223% to $738 million in 2021, and total debt of $290 million


Verano Holdings Corp.. VRNOF VRNO released its 2021 financial results which were prepared in accordance with US GAAP.

As part of the audit of its fiscal year 2021 financial statements, a change in the valuation of the consideration resulted in a revaluation and reclassification of certain acquisition-related assets and liabilities. Accordingly, the Company has restated and refiled on SEDAR its unaudited interim financial statements for the first, second and third quarters of 2021 prepared in accordance with IFRS. As a result, equity reflects a favorable increase of $706,322. There is no impact on the previously audited financial statements for 2019 and 2020.

2021 Financial Highlights

  • 2021 revenue increased by 223% at $738 millioncompared to 2020.

  • On a pro forma basis, revenue increased to $760 million, up 233% from 2020.

  • 2021 gross profit increased 147% to $335 million, or 45% of revenue, compared to $136 million or 59% of revenue in 2020; Excluding a one-time increase in inventory as well as the adoption of licensing amortization totaling $140 million, 2021 gross margin would have improved slightly compared to 2020.

  • Net loss for the year was $15 million, compared to net income of $38 million in 2020, driven mainly by the amortization of acquisitions and expansion investments.

  • Adjusted EBITDA was $323 million i.e. 44% of turnover, compared to $107 million i.e. 47% of turnover in 2020.

Q4 2021 Financial Highlights

  • Turnover of 211 million dollars.

  • Gross profit for the quarter was $115 million, or 54% of revenue.

  • Net income was $27 million, or 19% of revenue.

  • Adjusted EBITDA for the quarter was $84 million or 40% of revenue.

Q4 2021 Operational Highlights

  • Added $120 million of non-dilutive financing under the company’s senior secured credit facility.

  • Appointed Destiny Thompson as Chief of Staff

  • Strengthening the company’s commercial footprint, including:

    • Entered the Connecticut market ahead of adult-use sales with the acquisition of two active dispensaries and a 217,000 square foot cultivation and production facility;

    • Opened three new Florida MÜV dispensaries in Melbourne, Orange Park and Stuart;

    • Third Nevada Zen Leaf dispensary opens in Las Vegas;

    • Opening of a new Zen Leaf dispensary in West Chester, Pennsylvania; and

    • Zen Leaf Dispensary St. Charles, Illinois moved to a new, prime location.

2022 Recent Operational Highlights

  • Appointed Chief Financial Officer Brett Summerformer Vice President, Head of Supply Chain Finance and Chief Financial Officer of Kraft Heinz VSbusinessit is KHC WE . Operations.

  • $100 million funded under the company’s senior secured credit facility, resulting in total outstanding borrowings under the credit facility of $350 million, with an option to seek financing of up to $175 million on terms to be determined if the company exercises the option.

  • Entered into an arrangement agreement on January 31, 2022 to acquire Goodness Growth Holdings, Inc. GDNSF establish a strong footing in the attractive markets of New York, Minnesota and New Mexico upon closing of the proposed transaction.

  • Active operations spanning 13 states, including 96 dispensaries and 13 cultivation and processing facilities, with over one million square feet of cultivation capacity.

“2021 has been a year of transformation for Verano, our first as a public company. I am very proud of what we have achieved and I remain confident in our ability to build on this strong foundation to achieve long-term sustainable growth,” said George Archos, founder and CEO of Verano. “Growth in all of our key financial metrics was driven organically, from our core businesses and from the accretive acquisitions we made throughout the year. We have always focused on profitability, which we believe sets us apart in the industry. I was pleased to report results in line with expectations maintaining our industry-leading margin profile for 2021.”

Balance sheet and liquidity

As of December 31, 2021, the company current assets were $274 million, including cash and cash equivalents of $99 million. The company had a working capital of ($196) million and total debtexcluding rental debt and net of issue costs, $290 million. These figures do not include the $100 million impact of the increase in the company’s credit facility in the first quarter of 2022.

The total number of outstanding Class A subordinate voting shares of the company, including Class B proportional voting shares on an as-converted basis, was 327.86 million as of April 22, 2022.

Exemption request

Under applicable Canadian securities laws, the Company is required to file with the Canadian Securities Administrators annual and interim financial statements prepared in accordance with International Financial Reporting Standards and, with respect to annual financial statements, audited in accordance with Canadian auditing standards. The company has applied to the Canadian Securities Administrators for an exemption allowing it to:

  • file in Canada its annual financial statements for the year ended December 31, 2021 and its interim financial statements for the period ended March 31, 2022 in accordance with US GAAP;

  • have its annual financial statements audited in accordance with the US PCAOB;

  • prepare its related MD&A in accordance with SEC issuer requirements. This exemption has not yet been granted and there can be no assurance that it will be granted.

Conference call and webcast

The company will hold a conference call and audio webcast with analysts and investors on April 27, 2022 at 8:30 a.m. ET / 7:30 a.m. CT to discuss results and answer questions from investors and attendees.

Photo: Courtesy of Tim Foster on Unsplash

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