Grown Rogue International Inc. (GRIN) (
CSE.GRIN,
OTCMKTS: GRUSF,
Forum) has posted
positive adjusted EBITDA for the first time and positive cash flow for the second straight quarter. The multi-state cannabis company with operations and assets in Oregon and Michigan has
just released its financial and operating results for the three months ending April 30, 2020.
A deep dive into GRIN’s growth metrics should give cannabis industry investors good reason to take a hard look at this Company’s robust, vertically-integrated business model.
Grown Rogue has been consistently expanding its Oregon Indoor production quarter over quarter while also investing in a strategic expansion of the 80,000 sq. foot Golden Harvests facility in Michigan. In addition, the company’s business plan focusing on cost reductions, supply chain efficiencies and raising price points is increasing profitability.
The Company
recently reported that it decreased the cash cost to produce its award-winning, high-quality indoor dried flower to just USD$0.81 per gram (USD$368/lb) at its Medford, Oregon facility. With rising flower prices in Oregon and rapid inventory turn times of 7 days in April, down from 15 days in January, the company is firing on all cylinders.
Low costs, high margins, and quick turn times with retailers. A
win-win-win, if you will, for shareholders and would-be investors.
Q2 2020 Highlights
- First quarter of positive adjusted EBITDA of $47K and positive adjusted EBITDA year-to-date (YTD) of $42K. Adjusted EBITDA increased by $1 million in Q2 2020 versus Q2 2019 ($969K).
- Generated $120K in positive cash flow from operations, continuing the trend of self-sufficiency established in Q1 2020 and increasing the YTD total to $271K.
- Q2 Cash Gross Margin was 53% and 57% YTD, continuing the strong trend established in Q1 2020.
- Rapidly monetized inventory, despite restrictions placed on retailers due to COVID-19, achieving average inventory turns of eight days in Q2 2020 for Oregon indoor production.
- Reported a cash cost per gram produced of $0.83(2) for Oregon high quality indoor production.
- Total reported revenue was $1.2 million, including $1.1 million of Grown Rogue-branded product – a 40% increase versus Q2 2019. Proforma revenue, including pending mergers and acquisitions, was $1.5 million.
- Grown Rogue’s majority-owned subsidiary announced an option to acquire a controlling interest in a fully-licensed and operational company in Michigan, signed a management services agreement and completed a $600K debt financing
- Closed first tranche of CDN$500k financing with Cannabis Growth Opportunity Corp (“CGOC”)
Grown Rogue’s CEO Obie Strickler commented:
“The continued work and commitment of our team focusing on disciplined growth and profitability has resulted in our best quarter as a public company as indicated by our positive Adjusted EBITDA and cash flow. Grown Rogue continues to benefit from efficiency improvements in Oregon operations that have been combined with our ‘fewer, better’ account focus that is driving rapid inventory sales and a steady increase in pricing.”
Trading Volume Vigorous; Share Prices Up
As a picture paints a thousand words, a quick look at GRIN’s three-month performance demonstrates a strong, consistent, vertical growth trajectory moving forward through 2020.
(Click image to link to chart)
Since Q2 2019, the company has shifted its business strategy away from low margin, third-party product distribution and towards
highly profitable Grown Rogue branded product sales. This has allowed the Company to streamline its organizational structure, evaluate and improve internal production efficiencies, and adjust its sales strategy to focus on building long term partnerships with many of the best retailers in the U.S. In addition, Grown Rogue has benefited from a large increase in sun-grown (outdoor) flower pricing versus Q1 2019, which the Company locked in with key accounts as part of its ‘futures’ strategy.
(Click image to enlarge)
About the Company
Grown Rogue International is a vertically-integrated, multi-state cannabis family of brands with a mission to inspire consumers to “enhance experiences” through cannabis. Built on a strong foundation of an expert management team, award-winning grow team, state-of-the-art indoor and outdoor manufacturing facilities, and consumer insight-based product categorization to create innovative products thoughtfully curated from
“seed to experience.” Grown Rogue’s include sun-grown and indoor premium flower, along with nitro sealed indoor and sun-grown pre-rolls and jars.
All of Grown Rogue’s cultivars are categorized and marketed based on the expected effect on “Mind, Body and Mood” so consumers can seek out the right strain for the experience they are seeking. As responsible corporate citizens, Grown Rogue is a company based on five core values – transparency, integrity, honesty, authenticity, and education.
With Company shareholder value nearly doubling in the last three months, GRIN is not only building on its Q1 2020 momentum but putting a very wide smile on investors faces.
(Click image to enlarge)
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.