One of America’s biggest pot companies, Columbia Care Inc. (NEO: CCHW), said an expanding dispensary network helped it post record fourth-quarter sales.
The U.S. operator released its financial results Tuesday for the fourth quarter and full year ended Dec. 31, reporting US$23.2 million and US$77.5 million in net revenue.
Fourth-quarter revenue grew 111 per cent from the prior-year period, which the company attributed to growing sales from six new dispensaries it opened in the quarter.
“We launched adult-use sales in Illinois and Massachusetts markets where we experienced three- to five-times revenue growth almost overnight,” Columbia Care CEO Nicholas Vita said in the release.
The company also said it completed its Aurora cultivation facility in Illinois to tap further into the new, surging cannabis market there. The state reported US$74 million in the first two months, despite supply shortages.
Overall, the company’s six new dispensaries brings its total number in operation to 35.
But that doesn’t count an additional 23 stores the company is set to gain from its acquisition of Colorado-based The Green Solution.
Including revenue from those stores on a pro forma basis, Columbia care said its full year adjusted revenue comes in at US$154.5 million. The company expects the deal to close in Q2 2020.
The firm reported an adjusted earnings before interest, taxes, depreciation and amortization loss of US$13.9 million, which it said was driven by buildout and scaling efforts leading up to new market launches. Net loss for the fourth quarter and full year was US$28 million and US$106.7 million.
Columbia Care says it won’t stop expanding
However, the company completed a US$35 million sale leaseback transaction in the quarter. Columbia Care said it has US$47.5 million cash on hand as of Dec. 31, and no debt, to help with further expansion.
In fiscal 2020, Columbia plans to enter new U.S. medical markets in New Jersey and Virginia, and add four dispensaries in Florida, bringing its total up to 14 in that state.
While MedMen Enterprises (CSE: MMEN), another major U.S. cannabis retailer, has struggled financially with its aggressive store expansion plans, Columbia Care said its expansion strategy is working.
The company said its Florida build-out plan uses temporary locations instead of traditional cannabis stores, which allows it to reach dense population centres with much less capital investment and an improved labor model.
Columbia Care said it expects revenue up to US$180 million on a standalone basis and US$265 million on a pro forma basis, in fiscal 2020.
Last year, the company launched the first legal cannabis credit card in the U.S. for consumers to make in-store purchases. Columbia Care said its CNC Card was expanded into eight jurisdictions and will be an important part of its strategy moving forward.
Columbia Care stock slid two per cent Wednesday on the NEO Exchange in Canada.
Top photo via Columbia Care