TILT Holdings Inc. (OCTMKTS: TLLTF) has announced operating and financial results for the quarter and nine months ending September 30, 201, in which it reported revenue growth of 37% YoY.
Tilt reports 37% YoY growth in revenue
The company had revenue of $53.4 million, representing YoY growth of 37%, driven by cannabis and accessory and inhalation revenue growth in the third quarter. Cannabis revenue was up 19% to 11.2 million, while inhalation and accessory revenue was up 42% to $42.1 million. Gross profit was $12.7 million or 23.7% of revenue before fair value adjustment. Higher freight expenses for the inhalation and accessory business impacted gross margins. Adjusted EBITDA was $5 million, and at the end of the quarter, the company had cash and equivalents of $6.7 million.
CEO Gary Santo, “TILT’s B2B strategy originated from our belief that the rising supply of wholesale cannabis in multiple markets across the U.S. would require a differentiated approach, shifting away from bulk flower sales towards branded packaged goods. When we launched our strategy at the start of the year, we envisioned that marketplace transition would take 12 to 18 months as new cultivation came online. In the third quarter, we saw that timeline accelerate along with macro-economic pressure impacting consumers.”
Tilt revises adjusted EBITDA
Tilt reiterated its $205 million to $210 million sales projection, and the company anticipates revenue to be on the lower end of the range because of unanticipated delays in gaining product approvals in Pennsylvania. In addition, the company receives its Adjusted EBITDA outlook for 2021 to range between $24 million and $26 million representing a 42% to 50% YoY growth as a result of the approval delays and freight costs associated with the inhalation and accessories segment.
Santo added, “Our supply chain management expertise has been on full display throughout the year, and while there has been a near-term impact to our margins due to higher freight costs, our ability to strategically deploy working capital to ensure availability of product has benefitted our customers while attracting the business of our competitors’ customers.”