Monday, May 23, 2022
Schwazze (SHWZ)
Continuing to Build a Leading Regional MSO
Schwazze (OTCQX:SHWZ, NEO:SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
1Q22 Results. Revenue for the quarter totaled $31.8 million, up from $26.5 million in the fourth quarter and $19.3 million a year ago. The increase was mostly due to acquisitions as the Colorado market continued to experience softness from the 2021 COVID highs. Adjusted EBITDA was $7.9 million in the quarter. Schwazze reported an operating loss of $4.8 million and a net loss of $28.5 million, or $0.61 per share. We had forecast revenue of $35 million and net income of $1.7 million, or $0.03 per share.
One-Time Items Impact Results. First quarter 2022 COGS was impacted by $6.3 million of purchase accounting on acquisitions, compared to $2.2 million in the year ago period. One-time costs associated with acquisitions totaled $2.8 million. Below the line, results were impacted by $13.4 million of unrealized loss on derivative liabilities and a y-o-y increase in interest expense to $7.3 million from $961,282 in 1Q21.…
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.