Adam JacksonThe Cannabist Company Holdings Inc. (NEO: CBST) (OTCQX: CCHWF) reported its financial results for the fourth quarter and full year ending Dec. 31, 2023, eking past revenue expectations as the firm figures out how to move on from its terminated megadeal.
For the fourth quarter, The Cannabist Company, previously known as Columbia Care, reported a 4% increase in wholesale revenue, amounting to $16.4 million, which represented 13% of its $128.3 million in total revenue. That beat Seeking Alpha’s analyst average by $870,000. Net losses were trimmed to $72.5 million, versus $301 million in the previous year.
Full-year results
For the full year of 2023, The Cannabis saw its revenue decline slightly to $511.3 million versus 2022’s revenue of $511.5 million. Wholesale transactions constituted 12% of the company’s revenue. Net losses declined considerably for the year, dropping from 2022’s net loss of $421 million to 2023’s net loss of $174 million.
The end of the year saw the company maintaining a steady number of retail locations, with 86 stores at the close of the year and a minor adjustment to 85 stores by March 2024 due to strategic divestiture.
“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,” CEO David Hart said in a statement.
“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.”
The company highlighted several developments, including the launch of new cannabis products in various states as well as establishing partnerships with brands like Old Pal and Airo Brands to expand its product range and market presence.
The firm reported ending the year with $39.3 million in cash reserves, after reducing $30.6 million in senior debt during the fourth quarter. This is down from $48 million at the end of 2022. That debt reduction was part of a broader effort to improve the company’s financial stability, which also saw an increase in cash flow from operations to $9.4 million in the fourth quarter, mostly due to a targeted reduction in inventory.
Capital expenditures came out to $1.7 million during the quarter, and capital expenditures in 2024 are expected to remain in the range of $2 to $3 million per quarter, the firm said.
2024’s plans
Looking ahead to 2024, the plan also includes investments in new store openings and manufacturing upgrades to support anticipated growth. The planning follows the divestiture of a Utah license and retail location, which contributed $6.5 million in gross proceeds.
Hart added, “We began 2024 with renewed focus as The Cannabist Company…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.”
