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, CFA, 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.
Update. Schwazze, in conjunction with its new auditors, has determined that its financial statements for the two fiscal years ended December 31, 2023, will be restated due to the identification of certain accounting adjustments needed primarily relating to technical accounting areas. The Company filed an 8-k describing the necessary adjustments.
Impact. Although mostly related to technical accounting areas, the Company has concluded that the impact of these corrections is material and, therefore, worthy of restatement. However, Schwazze does not currently believe that the foregoing corrections will have any negative material impact on the Company’s revenue, adjusted EBITDA, cash from operations, or cash position.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
DENVER, Nov. 07, 2024 (GLOBE NEWSWIRE) — Medicine Man Technologies, Inc., operating as Schwazze, (OTC: SHWZ) (Cboe CA: SHWZ) (“Schwazze” or the “Company”), today announced preliminary financial and operational results for the third quarter ended September 30, 2024.
“We continued to generate momentum from our retail growth and optimization initiatives in Q3, reflected by our ability to outpace two highly competitive markets while generating sequential improvements in profitability and positive cash flow from operations,” said Forrest Hoffmaster, Interim CEO of Schwazze. “Our efforts to sharpen our pricing and promotional strategy, elevate the in-store experience, and improve product quality, assortment and in-stock positions are yielding positive results. I’m proud of our team’s hard work and dedication to drive these improvements in the overall customer experience, which has led to increased store traffic in both Colorado and New Mexico. Over the past year, our focused efforts to optimize our operations have built a solid foundation, setting the stage for sustained growth and enhanced levels of profitability in the year ahead.
“Due to our ongoing re-review process with our new auditor, Baker Tilly, we expect a delay in filing our Form 10-Q for the quarter ended September 30, 2024. Our team, in close collaboration with Baker Tilly, is making every effort to complete this re-review promptly. We expect to release our unaudited third quarter results and host a conference call in the coming weeks to discuss our financial and operational performance in greater detail.”
Q3 2024 Preliminary Financial Results
Based on preliminary and unaudited results, the Company expects to report the following for the third quarter ended September 30, 2024:
Revenue of approximately $42 million
Adjusted EBITDA of approximately $11 million
Cash flow from operations of approximately $0.2 million
At quarter end, the Company held cash and cash equivalents of approximately $11 million with principal amount of debt outstanding of approximately $196 million.
Update on Delayed Filing
As previously announced on April 8, 2024, Schwazze dismissed BF Borgers CPA PC (“BF Borgers”) as its independent registered public accountant and engaged Baker Tilly US, LLP (“Baker Tilly”) as its new independent accountant. Subsequent to the transition, on May 3, 2024, the SEC issued an Order against BF Borgers for systemic failures in meeting PCAOB standards, which impacted over 1,500 SEC filings and affected at least 75 percent of BF Borgers’ 369 clients.
As a result of the SEC Order, Schwazze’s new auditor needs additional time to complete its prior period review, which includes re-auditing the Company’s fiscal year 2023 financial statements and re-reviewing the closing of its 2022 balance sheet prior to filing its 2024 Annual Report. Baker Tilly is actively working to re-audit the Company’s financial statements for the associated periods.
Due to the ongoing re-review process, Schwazze anticipates a delay in filing its Quarterly Report on Form 10-Q for the three- and nine-months ending September 30, 2024. Moreover, the Company expects to simultaneously file its Quarterly Report on Form 10-Q for the three months ending March 31, 2024, and June 30, 2024.
About Schwazze
Schwazze (OTC: SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking 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.
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.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company’s previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intends,” “plans,” “strategy,” “prospects,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management’s current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact Sean Mansouri, CFA or Aaron D’Souza Elevate IR (720) 330-2829 ir@schwazze.com
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, CFA, 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.
Preliminary 3Q24 Results. Last night, Schwazze reported preliminary 3Q24 results. We believe the ongoing audit of past results is likely causing a delay in reporting results. According to the release, 3Q24 revenue is expected to be approximately $42 million, and adjusted EBITDA is expected to be approximately $11 million. In 3Q23, Schwazze reported revenue of $46.7 million and adjusted EBITDA of $14.1 million. We had estimated revenue of $44.5 million and adjusted EBITDA of $10.3 million.
Making Progress. In spite of the challenging operating environment, Schwazze continued to generate momentum from its retail growth and optimization initiatives in the quarter, reflected by the Company once again outpacing two highly competitive markets while generating sequential improvements in profitability and positive cash flow from operations. Management noted increased store traffic in both Colorado and New Mexico.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
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, CFA, 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.
Audit. Schwazze and its auditor are working diligently to complete the necessary re-audit of the 2023 financials. While management did not provide a timetable, we believe the process will be completed in the near-term. No material misstatements have been uncovered to date. Once audited financials are filed, we expect the Company to apply for re-listing of its shares.
Re-Scheduling. We continue to expect re-scheduling to occur in the near-term, which will have a positive impact on the entire industry. Schwazze continues to believe the elimination of 280e taxes will have a significant impact on cash flows for the Company. The Company also will seek to refile past tax returns to capture prior excess taxes paid under 280e.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
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, CFA, 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.
Results. Revenue of $43.2 million increased 2% y-o-y and was in-line with our $43 million estimate. Gross profit margin fell to 44% from 54.4% a year ago, but was in-line with our 43.6% projection. The GM decline reflects ongoing pricing pressure in both Colorado and New Mexico, as well as a greater mix of 3rd-party products in New Mexico and higher medical sales in Colorado. Schwazze reported a net operating loss of $2.7 million and a net loss of $13.9 million, or $0.20/sh. We were at a net loss of $0.19/sh.
Quarter Highlights. Schwazze generated sequential quarterly growth across all key financial metrics during the quarter. The Company continued to focus on sharper pricing and promotional strategies to drive store traffic and market share in both Colorado and New Mexico. Wholesale margins continued to show improvement.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
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, CFA, 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.
A Move. We had an opportunity to speak with management regarding the announcement that the OTC Market Group will move trading of SHWZ shares to the OTC Expert Market from OTC QX as a result of the Company’s delinquent 10-Q filing for the period ending March 31, 2024. We believe the move to be temporary and does not have an impact on the long-term investment potential of SHWZ shares.
Why? As we noted previously, Schwazze has been caught up in the BF Borgers case. Schwazze replaced Borgers as the Company’s accountant in April, before the SEC case against Borgers was announced. The Company’s new accountant Baker Tilly is re-auditing Schwazze’s 2023 financial statements, but the review will take longer than the OTC Market Group’s 45 day late filing grace period. We are hopeful the review will be completed in the August/September time frame.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
DENVER, July 01, 2024 (GLOBE NEWSWIRE) — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe CA: SHWZ) (“Schwazze” or the “Company”), today announced that its common stock will soon transition to the OTC Expert Market, under the ticker symbol “SHWZ” due to the Company’s delayed filing of its Form 10-Q for the period ended March 31, 2024, with the Securities and Exchange Commission (“SEC”). The delay was a result of an SEC Order regarding the Company’s previous auditor, BF Borgers CPA PC (“BF Borgers”), who was dismissed as Schwazze’s auditor prior to the SEC’s Order.
As previously announced on April 8, 2024, Schwazze dismissed BF Borgers as its independent registered public accountant and engaged Baker Tilly US, LLP (“Baker Tilly”) as its new independent accountant. Subsequent to the transition, on May 3, 2024, the SEC issued an Order to BF Borgers and its owner citing the deliberate and systemic failures to comply with Public Company Accounting Oversight Board (“PCAOB”) standards in its audits and reviews, which were incorporated in more than 1,500 SEC filings from January 2021 through June 2023 and affected at least 75 percent of BF Borgers’ 369 clients.
As a result of the SEC Order, the Company’s new auditor needs additional time to complete its prior period review before the Company files its Quarterly Report for the three months ended March 31, 2024. In addition, Baker Tilly is re-auditing its fiscal year 2023 financial statements and re-review the closing of its 2022 balance sheet prior to filing its 2024 Annual Report. Baker Tilly is actively working to re-audit the Company’s financial statements for the associated periods.
The Company intends to complete the necessary work to be current in its reporting obligations with the SEC in the coming months.
“Our decision to dismiss BF Borgers as our auditor was a strategic move to bolster our accounting rigor and it proved to be the right decision given the SEC’s subsequent charges on BF Borgers,” said Forrest Hoffmaster, Interim CEO of Schwazze. “Although our OTC listing was affected by BF Borgers’ actions, we are diligently working with our new auditor to complete the re-audit process in an efficient and timely manner. We are also pursuing recoveries for all fees related to BF Borgers.”
As a result of the delayed filing, Schwazze has sought from, and is in communication with, the Ontario Securities Commission (“OSC”) concerning the availability of a management cease trade order (“MCTO”) in respect of the missed deadline for the Quarterly Report ended March 31, 2024. If an MCTO is granted, it is expected that the general investing public will continue to be able to trade in the Company’s listed common shares, however, the Company’s Named Executive Officers will not be able to trade in the Company’s common shares. The Company confirms it will comply with the provisions of the alternative information guidelines under National Policy 12-203 – Management Cease Trade Orders for so long as an MCTO remains in effect.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking 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.
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.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company’s previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intends,” “plans,” “strategy,” “prospects,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management’s current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact Sean Mansouri, CFA or Aaron D’Souza Elevate IR (720) 330-2829 ir@schwazze.com
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, CFA, 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.
Improving Outlook. Schwazze is seeing improvement in both Colorado and New Mexico from a competitive standpoint. In Colorado, pricing continues to stabilize, which will prove positive to both the top line and gross margin dollars. In New Mexico, enhanced enforcement of illegal operators and the illicit market is beginning to produce results, which will benefit Schwazze over the longer-term, in our view.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
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, CFA, 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.
1Q24 Results. Revenue of $41.6 million was up 4% y-o-y, driven by new store growth. Gross margin declined to 43.1% from 54.6% due to pricing pressure in New Mexico and a higher mix of lower margined medical sales. Schwazze reported an operating loss of $2.7 million compared to $5.6 million of operating profit in 1Q23. GAAP net loss totaled $18.2 million, or a loss of $0.24/sh, versus essentially breakeven last year. We had estimated revenue of $42.5 million and a net loss of $11.6 million, or a loss of $0.16/sh.
Environment Still Challenging. The Colorado and New Mexico markets remain some of the most competitive cannabis markets in the country. A supply/demand situation still coming into balance and too many retail locations will continue to impact both markets in the near-term.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
FY 2023 Revenue of $172.4 Million; Income from Operations of $3.3 Million; Adjusted EBITDA of $53.4 Million or 31% of Revenue
Generated $12.2 Million of Operating Cash Flow in FY 2023
DENVER, March 27, 2024 /CNW/ – Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe: SHWZ) (“Schwazze” or the “Company”), today announced financial and operational results for the fourth quarter and full year ended December 31, 2023.
“This past year, the Schwazze team delivered solid top-line growth in two highly competitive markets with 31% adjusted EBITDA margins and improved operating cash flow,” said Forrest Hoffmaster, Interim CEO of Schwazze. “We continued to sharpen our retail strategy while expanding our store footprint by more than 50% to 63 dispensaries across our two markets. Although the Colorado and New Mexico markets were pressured in 2023, we have built a solid foundation with best-in-class service for our patients and customers. Internally, we are also relentlessly focused on maximizing the operating efficiencies of our manufacturing and cultivation facilities to drive higher yields, improved flower quality, and greater output.”
“With strong demand and over 680 recreational retail stores at year-end, the competitive landscape in Colorado is fierce, underscoring the importance of our investments in and attention to elevating the customer experience. We significantly outpaced the market in Q4 on a sequential and year-over-year basis and expect to bolster our growth through improvements in customer acquisition, retention, and loyalty, as well as in the overall retail experience. Additionally, we are beginning to see wholesale pricing stabilize, which we anticipate will continue based on plant counts and ongoing retail pricing pressure.”
“In New Mexico, the proliferation of new licenses has led to increased competition and aggressive pricing strategies from certain players. Cannabis sales in the state were up 18% across a store base that was over 50% higher year-over-year in Q4, leading to lower average revenue per store. While we are beginning to see a slow-down in net new store openings, we anticipate a challenging market ahead. We remain focused on cost optimization and asset utilization while implementing a balanced pricing and promotional strategy to drive traffic into our stores, where we believe we excel in delivering an elevated retail experience. We are committed to fulfilling our promise of being the retailer of choice in New Mexico.”
“Looking ahead, we are optimistic about the regulatory momentum in the industry at large. In the meantime, we will continue to elevate the customer experience, improve our loyalty program, increase our cost efficiencies, and enhance our retail assets. Our team has a demonstrated track record of executing in competitive markets like Colorado and New Mexico where we remain one of the largest operators. We look forward to driving growth and profitability across each of our markets in 2024.”
Fourth Quarter 2023 Financial Summary
$ in Thousands USD
Q4 2023
Q3 2023
Q4 2022
Total Revenue
$43,325
$46,747
$40,147
Gross Profit
$7,034
$21,438
$21,719
Adjusted Gross Profit[1]
$20,180
$21,438
$21,719
Operating Expenses
$23,276
$12,514
$24,224
Income (Loss) from Operations
$(16,242)
$8,924
$(2,505)
Adjusted EBITDA[2]
$10,953
$14,119
$13,285
Operating Cash Flow
$3,452
$6,946
$6,260
Full Year 2023 Financial Summary
$ in Thousands USD
FY 2023
FY 2022
Total Revenue
$172,448
$159,379
Gross Profit
$76,024
$80,289
Adjusted Gross Profit1
$89,170
$86,830
Operating Expenses
$72,735
$67,434
Income from Operations
$3,289
$12,855
Adjusted EBITDA2
$53,412
$52,010
Operating Cash Flow
$12,201
$6,694
___________________________
1 Adjusted Gross Profit is a non-GAAP measure as defined by the SEC and represents gross profit excluding non-cash inventory adjustments. The Company uses Adjusted Gross Profit as it believes it better explains the results of its core business. See “ADJUSTED GROSS PROFIT RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release.
2 Adjusted EBITDA is a non-GAAP measure as defined by the SEC, and represents earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs. The Company uses Adjusted EBITDA as it believes it better explains the results of its core business. See “ADJUSTED EBITDA RECONCILIATION (NON-GAAP)” section herein for an explanation and reconciliations of non-GAAP measure used throughout this release.
Full Year 2023 Operational Highlights
Expanded the Company’s retail footprint by more than 50% in New Mexico and Colorado to 63 dispensaries.
Completed the acquisition of Everest Apothecary, adding 14 dispensaries, one cultivation facility, and one manufacturing plant to the Company’s New Mexico operations.
Acquired Standing Akimbo, the largest medical cannabis dispensary in Colorado, and opened the Company’s first medical dispensary in Colorado Springs under the Standing Akimbo banner.
Acquired two Colorado retail dispensaries in Fort Collins and Garden City from Smokey’s.
Unveiled an enhanced, custom ecommerce platform in New Mexico under the R. Greenleaf banner.
Increased wholesale penetration in Colorado and New Mexico by over 3x year-over-year to more than 27% total door penetration in both states.
Grew Lowell Farms pre-roll sales by over 250% in Colorado where it is now the #1 pre-roll in the state. In addition, Lowell is in six of the largest Colorado accounts and will be available for wholesale in New Mexico starting April 1st, 2024.
Grew sales with Wana, our fan-favorite gummies brand, by 48% in New Mexico where it is now in 130 doors with eight of the top ten accounts in the state.
Fourth Quarter 2023 Financial Results
Total revenue in the fourth quarter of 2023 increased 8% to $43.3 million compared to $40.1 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period and increased wholesale revenue, partially offset by pricing pressure from the proliferation of new licenses in New Mexico.
Gross profit for the fourth quarter of 2023 was $7.0 million or 16.2% of total revenue, compared to $21.7 million or 54.1% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by one-time, non-cash inventory adjustments of approximately $13.1 million comprised of $3.1 million of product consolidation, obsolescence, and shrinkage expenses, $4.3 million of net realizable value adjustments, and $5.8 million of fair value adjustments on acquired inventory in New Mexico in 2023. Adjusted gross profit, which excludes non-cash inventory adjustments, for the fourth quarter of 2023 was $20.2 million or 46.6% of revenue.
Operating expenses for the fourth quarter of 2023 were $23.3 million compared to $24.2 million for the same quarter last year. The decrease was primarily due to a lower impairment charge in the fourth quarter of 2023. This was partially offset by an increase in four-wall SG&A expenses associated with the 22 additional stores in Colorado and New Mexico that are still ramping, as well as greater salaries and stock-based compensation.
Loss from operations for the fourth quarter of 2023 was $16.2 million compared to $2.5 million in the same quarter last year. The decrease was driven by the aforementioned lower gross profit, primarily related to the non-cash inventory adjustment. Net loss was $33.9 million for the fourth quarter of 2023 compared to $27.3 million for the same quarter last year.
Adjusted EBITDA for the fourth quarter of 2023 was $11.0 million or 25.3% of revenue, compared to $13.3 million or 33.1% of revenue for the same quarter last year. The decrease in Adjusted EBITDA margin was primarily driven by higher operating expenses associated with the 22 additional stores that are still ramping.
As of December 31, 2023, cash and cash equivalents were $19.2 million compared to $38.9 million on December 31, 2022. Total debt as of December 31, 2023, was $156.8 million compared to $127.8 million on December 31, 2022.
Conference Call
The Company will conduct a conference call today, March 27, 2024, at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023.
Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing ir@schwazze.com.
Date: Wednesday, March 27, 2024 Time: 5:00 p.m. Eastern time Toll-free dial-in: (888) 664-6383 International dial-in: (416) 764-8650 Conference ID: 38840334 Webcast: SHWZ Q4 & FY 2023 Earnings Call
The conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website at https://ir.schwazze.com.
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking 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.
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.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company’s previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intends,” “plans,” “strategy,” “prospects,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management’s current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact Sean Mansouri, CFA or Aaron D’Souza Elevate IR (720) 330-2829 ir@schwazze.com
MEDICINE MAN TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS) For the Periods Ended December 31, 2023 and 2022 Expressed in U.S. Dollars
For the Three Months Ended
For the Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
(Audited)
(Audited)
Operating Revenues
Retail
$
39,592,779
$
36,868,429
$
155,463,816
$
141,254,893
Wholesale
3,730,749
3,158,670
16,765,425
17,819,938
Other
1,287
120,188
218,545
304,388
Total Revenue
43,324,815
40,147,287
172,447,786
159,379,219
Total Cost of Goods & Services
36,291,059
18,428,528
96,424,150
79,090,461
Gross Profit
7,033,756
21,718,759
76,023,636
80,288,758
Operating Expenses
Selling, General and Administrative Expenses
10,848,029
8,922,627
39,916,518
29,036,962
Professional Services
1,115,457
1,112,975
3,558,501
6,722,554
Loss on Impairment
1,810,890
8,011,405
1,801,740
8,011,405
Salaries
6,561,800
5,292,996
23,883,354
20,990,290
Stock Based Compensation
2,952,669
883,890
3,574,831
2,672,713
Total Operating Expenses
23,288,845
24,223,893
72,734,944
67,433,924
Income from Operations
(16,255,089)
(2,505,134)
3,288,692
12,854,834
Other Income (Expense)
Interest Expense, net
(8,112,391)
(6,827,557)
(32,069,082)
(30,139,645)
Unrealized Gain (Loss) on Derivative Liabilities
1,384,228
(9,690,200)
15,870,233
18,414,760
Other Loss
68,400
3,736
68,400
24,136
Loss on Business Disposition
(1,968,807)
(4,684,366)
(1,968,807)
(4,684,366)
Unrealized Gain (Loss) on Investments
–
3,083
1,816
(39,270)
Total Other Income (Expense)
(8,628,570)
(21,195,304)
(18,097,441)
(16,424,385)
Pre-Tax Net Income (Loss)
(24,883,659)
(23,700,438)
(14,808,749)
(3,569,551)
Provision for Income Taxes
4,494,049
3,638,695
19,740,595
14,898,064
Net Income (Loss)
$
(29,377,708)
$
(27,339,133)
$
(34,549,344)
$
(18,467,615)
Less: Accumulated Preferred Stock Dividends for the Period
(1,541,341)
(2,508,677)
(8,154,993)
(7,802,809)
Net Income (Loss) Attributable to Common Stockholders
$
(30,919,049)
$
(29,847,810)
$
(42,704,337)
$
(26,270,424)
Earnings (Loss) per Share Attributable to Common Stockholders
Basic Earnings (Loss) per Share
$
(0.43)
$
(0.57)
$
(0.66)
$
(0.49)
Diluted Earnings (Loss) per Share
$
(0.43)
$
(0.57)
$
(0.66)
$
(0.49)
Weighted Average Number of Shares Outstanding – Basic
71,680,200
53,637,003
64,535,245
53,637,003
Weighted Average Number of Shares Outstanding – Diluted
71,680,200
53,637,003
64,535,245
53,637,003
Comprehensive Income (Loss)
$
(29,377,708)
$
(27,339,133)
$
(34,549,344)
$
(18,467,615)
MEDICINE MAN TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Periods Ended December 31, 2023 and 2022 Expressed in U.S. Dollars
For the Twelve Months Ended
December 31,
2023
2022
(Audited)
(Audited)
Cash Flows from Operating Activities:
Net Income (Loss) for the Period
$
(34,549,344)
$
(18,467,615)
Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities
Depreciation & Amortization
20,933,541
10,660,172
Non-Cash Interest Expense
4,024,604
4,118,391
Impairment of Goodwill
1,801,740
8,011,405
Non-Cash Lease Expense
7,648,531
3,910,679
Deferred Taxes
(2,090,967)
502,070
Loss on Disposition of Business Units
1,968,807
4,684,369
Change in Derivative Liabilities
(15,870,233)
(18,414,760)
Amortization of Debt Issuance Costs
1,686,049
1,686,048
Amortization of Debt Discount
8,523,493
7,484,613
(Gain) Loss on Investments, net
(1,816)
39,270
Stock Based Compensation
3,590,473
812,073
Changes in Operating Assets & Liabilities (net of Acquired Amounts):
Accounts Receivable
927,259
(105,185)
Inventory
4,571,069
789,399
Prepaid Expenses & Other Current Assets
1,579,349
(2,770,179)
Other Assets
263,419
(248,682)
Change in Operating Lease Liabilities
(7,498,128)
(13,113,041)
Accounts Payable & Other Liabilities
(3,241,850)
11,845,245
Income Taxes Payable
17,934,967
5,270,074
Net Cash Provided by (Used in) Operating Activities
12,200,963
6,694,346
Cash Flows from Investing Activities:
Collection of Notes Receivable
11,944
–
Cash Consideration for Acquisition of Business, net of Cash Acquired
(15,834,378)
(58,981,226)
Purchase of Fixed Assets
(7,865,654)
(14,007,892)
Purchase of Intangible Assets
(2,750,000)
–
Investment in Private Entity
–
(2,000,000)
Net Cash Provided by (Used in) Investing Activities
(26,438,088)
(74,989,118)
Cash Flows from Financing Activities:
Payment on Notes Payable
(5,354,218)
(134,498)
Proceeds from Issuance of Common Stock
–
978,308
Payment for Statutory Withholdings on RSU
(108,978)
–
Net Cash Provided by (Used in) Financing Activities
(5,463,196)
843,810
Net (Decrease) in Cash & Cash Equivalents
(19,700,321)
(67,450,962)
Cash & Cash Equivalents at Beginning of Period
38,949,253
106,400,216
Cash & Cash Equivalents at End of Period
$
19,248,932
$
38,949,253
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest
$
17,896,954
$
15,243,990
Cash Paid for Income Taxes
5,000,000
12,340,000
MEDICINE MAN TECHNOLOGIES, INC. ADJUSTED EBITDA RECONCILIATION (NON-GAAP) For the Periods Ended December 31, 2023 and 2022 Expressed in U.S. Dollars
DENVER, March 12, 2024 /CNW/ – Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe: SHWZ) (“Schwazze” or the “Company”), will host a conference call on Wednesday, March 27, 2024 at 5:00 p.m. Eastern time to discuss its financial and operational results for the fourth quarter and full year ended December 31, 2023. The Company’s results will be reported in a press release prior to the call.
The Schwazze management team will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing ir@schwazze.com.
Date: Wednesday, March 27, 2024 Time: 5:00 p.m. Eastern time Toll-free dial-in: (888) 664-6383 International dial-in: (416) 764-8650 Conference ID: 38840334 Webcast: SHWZ Q4 & FY 2023 Earnings Call
The conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website at https://ir.schwazze.com.
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe: 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.
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.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit http://www.schwazze.com/.
Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza Elevate IR (720) 330-2829 ir@schwazze.com
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.
CEO Steps Away. Friday, Schwazze announced Nirup Krishnamurthy’s resignation as Schwazze Chief Executive Officer and as a member of the Board of Directors, effective February 20, 2024, due to personal reasons. In his place, Forrest Hoffmaster, the Company’s Chief Financial Officer, has been appointed to the additional role of interim CEO.
Forrest Hoffmaster. Mr. Hoffmaster joined the Company in January 2023, bringing over 30 years of executive experience in finance and operations for both public and private companies. Prior to Schwazze, Mr. Hoffmaster served as CEO of New Seasons Market, a specialty gourmet food retailer, where he navigated the company through one of the most disruptive periods in the retail grocery industry. Under his leadership, Mr. Hoffmaster implemented a focused growth and cost optimization program, enabling the company to grow EBITDA by over 30% in two years. Prior to New Seasons Market, Forrest held leadership positions with other leading grocers, including Whole Foods Market and H-E-B.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
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.
3Q23 Results. Revenue of $46.7 million was up 8.2% y-o-y and in-line with our $47 million estimate. Adjusted EBITDA totaled $14.1 million and the Company generated $6.9 million of CFFO. The bottom line was impacted by a number of one-time impacts, which resulted in a $1.9 million loss, or a loss of $0.03/sh. We had forecast a $7.1 million loss, or a loss of $0.10/sh.
Light. The overall environment remains challenged, whether due to supply, less demand or increased competition, but there are pockets of light suggesting we should see incremental improvement in the environment over time. Schwazze continues to stay the course and we expect them to come out of the current malaise a stronger, better positioned company.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
