305% GROWTH IN CANNABIS SALES OVER 2020
TORONTO, March 31, 2022 /CNW/ - Trees Corporation (NEO: TREE) (the "Company" or "Trees"), a next-now cannabis company at the intersection of community, content, and commerce, today released its audited annual consolidated financial statements (the "annual financial statements") and management's discussion and analysis ("MD&A") for the year ended December 31, 2021.
Michael Klein, CEO said "Our performance in 2021 is a testament to the strength of the entire Trees team to grow our consumer base and build value for shareholders. In the year ahead, we will continue with our strategy to scale our in-store retail operations and digital platforms, uniquely engaging with the 360-cannabis consumer."
"Through 2021, Trees has evolved from a private single store operator to a publicly listed platform of 11 Trees branded stores in Ontario and British Columbia," said Jeff Holmgren, President, and CFO of Trees. "With significant announcements in the first quarter of 2022, Trees has demonstrated an ability to execute on an acquisition-based growth strategy and we expect will continue to unfold through the balance of the year."
2021 ANNUAL FINANCIAL AND OPERATIONAL HIGHLIGHTS
- Cannabis sales of $4.3 million, a 305% increase over the prior year;
- Total revenues of $4.6 million, a 284% increase over the prior year;
- Gross profit of $1.6 million (34.2% of sales), a 223% increase over $0.5 million in the prior year;
- Cash increased by $1.1 million to $1.3 million as at December 31, 2021; and
Trees currently has 11 Trees branded stores open, 7 corporately owned stores in Ontario and 4 in B.C., (of which the B.C. stores are subject to a brand license agreement until the closing of Trees' pending acquisition of the B.C. stores, which is subject to the satisfaction of all conditions precedent including regulatory approval). An additional 2 store (1 in Ontario and 1 in B.C.) are anticipated to open in the second quarter of 2022.
The Company reported a net loss of $13.3 million ($6.1 million in 2020) which includes $10.4 million of non-cash charges relating to revaluations of financial obligations and transaction costs in connection with a series of corporate transactions undertaken during the year including the Company's go-public transaction on December 22, 2021. "With these corporate changes behind us, Trees is now in a position to delivery substantial growth and increasing profitability in 2022 and beyond," said Mr. Holmgren.
SIGNIFICANT ANNOUNCEMENTS SUBSEQUENT TO THE YEAR END
Miraculo Acquisition: On March 15, 2022, the Company closed the acquisition of Miraculo Inc., an integrated media, technology, and consumer product company that addresses the needs of underrepresented audiences in the medical cannabis and CBD markets. Miraculo launched several verticals including "cannabisMD.com", a consumer-education platform designed to help guide consumers on their exploration of the benefits of medical cannabis and CBD; and "askCMD.com", a proprietary recommendation engine guiding consumers to the CBD products that best fit their needs.
Executive Management and Board Changes: On March 15, 2022 concurrent with the announcement of the closing of the Miraculo acquisition, the Company appointed Michael Klein as Chief Executive Officer of the Company, in addition to the appointment of Jeff Holmgren as President and CFO of the Company on February 7, 2022. The Company also added Mr. Klein, G. Scott Paterson, and Lisa Dea to the board of directors of the Company. These recent changes to the leadership of Trees has added significant industry expertise and leadership to help guide the Company through its planned growth strategy for 2022 and beyond.
Camp Cannabis Acquisition: On March 28, 2022, the Company announced that it had entered into an acquisition agreement to acquire all of the issued and outstanding common shares of Barnard Cann Ltd. (o/a Camp Cannabis) which owns and operates retail cannabis stores at three Ontario locations in Burlington, Milton and Kanata, with a fourth location in Gloucester expected to open soon. The Company anticipates satisfying all requisite closing conditions later this spring.
2021 Financial Results
For further information, refer to the Company's annual financial statements and MD&A for the year ended December 31, 2021, which are available from the Company's profile on SEDAR, at www.sedar.com, or on the Company's website at www.treescorp.ca.
About Trees
Trees is a cannabis company at the intersection of community, content, and commerce. Publicly traded, Trees offers a differentiated retail experience, combined with digital platforms that aim to educate and amplify, unlocking emerging consumer segments and need states that allows Trees to uniquely engage the 360 cannabis consumer. The company has 11 Trees branded storefronts in Canada, including seven (7) stores owned and operated in Ontario and four (4) stores operated in BC, subject to the closing of the acquisition of the assets of 101 pursuant to the terms of the third amended and restated asset purchase agreement between Trees and 1015712 B.C. Ltd. (the "APA"). The closing of the transactions contemplated by the Retail Store APA is subject to certain conditions precedent, including the receipt of certain licensing approvals and related regulatory consents.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
Forward-looking statements in this document include, among others, statements relating to the Trees' expectations regarding its ability to grow its consumer base and create shareholder value, the Company's strategy to scale in-store retail operations and digital platforms, the Company's ability to successfully execute its strategy of acquisition-based growth in 2022 and beyond, the closing of the acquisition of Camp Cannabis and the timing thereof, the expected receipt of regulatory approvals, the closing of the transactions contemplated by the APA, expectations regarding the Company's ability to unlock and capture emerging consumer segments across its platforms, expectations regarding the Company's ability to engage its customers and new consumer segments and need states, the expectation that the Company will be successful in its growth strategy, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company's business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company's securities, regardless of its operating peers; (e) adverse changes in the public perception of cannabis; (f) the impact of COVID-19; and (g) general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.
The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
The NEO Exchange has neither approved nor disapproved the contents of this press release and accepts no responsibility for the adequacy or accuracy of this release.
SOURCE Trees Corporation
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