Wednesday, May 17, 2023
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, Managing Director, Equity Research Analyst, Generalist , 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.
1Q Results. Schwazze reported revenue of $40 million, an increase from last year’s $31.8 million. We had estimated revenue of $41.5 million. Schwazze reported net income, before preferred dividends, of $1.7 million, compared to a loss of $26.8 million last year. After preferred dividends, net loss was $283,965, or a loss of $0.01/sh, versus a loss of $28.5 million, or a loss of $0.61/sh, last year. Adjusted EBITDA was $14.5 million, or a margin of 36.3%, compared to $7.9 million, or 24.7%, last year.
Retail Solid, Wholesale Taking Baby Steps. Retail sales rose 35% to $35.8 million. In the Colorado wholesale market, flower pricing remains compressed but has begun to show signs of stability. Quarter-over-quarter wholesale sales grew 29% from $3.2 million in the fourth quarter of 2022 to $4.1 million in the first quarter of this year.
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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.