CCC (Cannabis Control Commission) in Massachusetts approved cultivation and processing facilities and Mission Dispensary of 4Front Ventures Corp (OTCMKTS:FFNTF). The agency also approved production operations and adult-use cannabis retail sales of 4Front, which will commence sales on September 4, 2020.
Improves bottom line and topline growth
4Front addresses the adult-use market in Massachusetts and improves its bottom line and topline growth significantly in H2 2020 and 2021 by expanding its operations. The company is also expanding its manufacturing facilities in Georgetown, Massachusetts, to satisfy the domestic market’s growing demand.
CEO of 4Front, Leo Gontmakher, said the company achieved an important milestone by receiving the license for adult-use cannabis in Worcester. The company also obtained a license for adult-use cannabis in August for its Georgetown facility. It is consistent with its policy of setting the targets and accomplishing them on time.
4Front posted a growth of 36% QoQ to $23.7 million in Systemwide proforma sales in Q1 2020. Its IFRS sales in Q1 2020 rose by 37% QoQ to $17.7 million. Despite the ongoing coronavirus, the company is enjoying robust demand for its products in all the regions where it operates because cannabis is an essential business.
Expects to complete the funded expansion in Q4 2020
4Front will complete the funded expansion in Illinois and Massachusetts based manufacturing facilities. It will maintain positive cash flow in H2 2020 and expects to achieve operational leverage next year.
4Front reduced its corporate overheads by 40% in Q1 2020. The company holds a debt of $80.1 million in its Washington operations by the end of Q1 2020. It maintains a facility of 176,000 Sq. Ft. in Washington for production, cultivation, and distribution. 4Front is also putting in efforts to strengthen its balance sheet by financing/ sale-leaseback of the affiliated facilities based in Washington.
Gontmakher said the company focuses on its low-cost production and cultivated models in the targeted states to drive growth going forward. The company strengthened its balance sheet and streamlined its cost structure in Q1 2020 and set the stage to accelerate growth in its core markets like California, Michigan, Massachusetts, Illinois, and Washington.
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