4Front Ventures Corp. FFNT FFNTF announced its third quarter financial results on Monday for the three months ended Sept. 30, 2023, revealing an 18% year-over-year drop in revenue.
However, in Illinois the company’s wholesale revenue nearly tripled over the same period, being up 178% year-over-year and 40% sequentially.
Leo Gontmakher, the company’s CEO, praised its operational results in Illinois, a cannabis market that has been setting records in sales month over month with $139.53 million in September in marijuana products sold. He also commented on the company’s plans for Illinois.
“We are on track to have a total of five operational stores in Illinois by fall 2024, starting with the first new store in Q1 and planning to inaugurate an additional store roughly every two months thereafter,” Gontmakher said. “Locations for two of the three additional stores have already been selected for build-out.”
Gontmakher also touched on the exit from California and relocation of the company’s operations to Illinois.
“The strategic realignment of our state footprint was crucial to mitigate the continued losses and challenges we experienced from the demanding California market,” he said. “With the drag on our profitability now behind us, we can place greater focus on our core markets of Illinois, Massachusetts, and Washington, where we are generating positive operating cash flow and anticipate the most promising growth opportunities.”
Q3 Financial Results
- Total revenue (a GAAP measure) was $23 million, down from $28.1 million in the prior year’s period.
- Gross profit totaled $9.3 million, down from $17 million in the third quarter of last year.
- Total operating expenses amounted to $23.4 million, up from $14.7 million in the same quarter of 2022.
- Net loss (a GAAP measure) was $62 million, up from $8.6 million in the prior year’s period.
- Adjusted EBITDA from continuing operations came in positive at $3.5 million, down from positive adjusted EBITDA of $8.2 million in the corresponding period of 2022.
- As of Sept. 30, 2023, the company had $269.3 million in total assets, down from $344.7 million in on Dec. 31, 2022.
- As of Sept. 30, 2023, the company had $319.9 million in total liabilities, up from $316.4 million in on Dec. 31, 2022.
“The third quarter marked the beginning of a transitional period for our business, which we firmly believe will positively impact our future performance and the long-term success of 4Front,” Gontmakher said.
FFNTF Price Action
4Front’s shares were trading 0.0322% lower at $0.18 per share on Tuesday late morning.
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