Goodness Growth Reports 16% YoY Revenue Growth In Q1, Progress Regarding New York Exit

Author: Nina Zdinjak | May 08, 2024 07:25am

Cannabis company Goodness Growth Holdings, Inc. (CSE:GDNS) (OTCQX:GDNSF) reported financial results Tuesday for its first quarter ended March 31, 2024, with net revenue of $24.09 million, up by 16% from $19.09 million in the same period year ago.

"Our first quarter results reflect a continuation of the trends we observed during the fourth quarter, with continued improvements in operating and financial performance driven by the commencement of adult-use sales in Maryland in July 2023," stated CEO Josh Rosen. "In 2024, our teams remain focused on executing the key tenets of our CREAM & Fire strategy. As it relates to our divestiture process in New York, we continue to make progress with Ace Venture Enterprises and are also anticipating receiving approval to sell wholesale into the adult-use market shortly."

Q1 2024 Financial Results Compared To Q1 2023

Gross profit was $12.24 million, compared to $9.52 million.
Gross profit margin was 50.8%, versus 49.9%.
Net loss amounted to $6.71 million or $0.05 per share, compared to a loss of $8.41 million, or $0.07 per share.
EBITDA was a gain of $6.8 million, which compares to $1.4 million.
Operating income was $4.8 million, versus $400,000.
As of March 31, 2024, total current assets were $147.2 million, including cash on hand of $12.6 million.

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Rosen continued, "With a short-term extension completed last week, we are also close to finalizing a longer-term extension with our senior secured lender, which has been supported by our progress with the New York divestiture and improved operating performance; that said our overall credit metrics have significant room for improvement and we continue to feel the pain of what we believe was the wrongful termination of our merger agreement with Verano."

The earnings report comes after Goodness Growth took legal action against Verano Holdings, Inc (OTCQX:VRNOF) in a case concernung Verano's termination of a share exchange agreement, which had proposed the acquisition of Goodness Growth's capital stock in 2022.

The merger between Chicago-based Verano and Minneapolis-based Goodness Growth went sideways on October 14, 2022, when Verano terminated the agreement. The merger was valued at $413M at that time. This led to a civil claim from Goodness Growth, which is seeking substantial damages of more than twice that amount. The sum claimed is estimated at $860.9 million based on Verano’s alleged breach of contract and lack of good faith.